When is the right time to seek investment for your startup ?

There are jargon of books, articles and blogs explaining how to pitch investors for new start-ups. But no one tell us when is the right time, the right phase to seek investment for your startup from those investors. There’s no magical moment where a light will go on and you’ll realize that now is the time. It is a cynical question. 

Of course, you'll have your pre planned investments by angel investors or by friends and family. Those are your internal investments which you need to start your business. For the business to grow and expand, there is a continuous need for fund. It's like you've laid the foundation and it's time to find resources which will help your start up flourish. So, when is the time? 

1. When your start-up is established 

Your start-up has took off well and has a minimum viable product, or at least something tangible to show your investors the value of your idea. Investors also want to see some early traction in the market, sales or pre sales. It will emphasize the fact that people want your product and there is a need for it. 

2. When you've proven demand for your product by making sales 

Customer engagement is the key. If there is a market for your business and if it going to make money, it is the proof of the caramel for a potential investor. Ideas are easy. Once you show that you’ve got engagement then your idea starts becoming a business. Be sure to add value to the project besides an idea. Because once you tell someone your idea he can bring same value to the table. 

3. When you’ve validation points 

Investors need to see some convincing validation points. Convincing an investor by showing them only the potential market numbers from some data research. Or when you manage to set up some clunky website aren’t validation points. Validations of your product, the need for a solution to problem, value of a potential customers for your product or service are actual significant points.

4. When you have at least one repeatable, predictable, and profitable system in place for selling your product. 

Investors put their money on stake on your model, untill and unless you have at least one repeatable, predictable, and profitable system in place for selling your product, it's hard to seek funding.

5. When taking an equity investment would let you grow the company faster than the other means that might be at your disposal: bootstrapping, debt financing, organic growth, joint ventures, etc. 

When it is time to seek out investors, do your research first. Not every investors carry same interests. Google the investors who focus on different opportunities, get their history in terms of who they have invested in. See what they look for. Build a relationship and then pitch your startup with a proof that your idea is validated.

Also Read : 5 easy ways to raise capital for your startup and All about angel investors you need to know

Once you have positive feedback on your proposition you are ready to seek investment for your startup, not before that. 

Raise from the right person, raise at right time!

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