How To Identify Early Investors For A Niche Tech Product
When I developed the idea for a mobile phone for kids, I knew it was a product that filled a need and provided an important solution for parents who struggled with what to do about keeping kids connected in this technology-obsessed world.
To find investors willing to invest in my tech product, I knew I’d have to identify those who not only recognized the problem I wanted to solve, but also connected with my solution in a way that other investors wouldn’t.
Here’s what I learned that could help other startup founders identify investors for their own niche tech product:
Define your ideal investor.
Before you dive into your search, make sure you have an idea of what a good investor for your company looks like. It’s important to examine an investor as you would a partner in a personal or professional relationship. Even if an investor may not become directly involved in your startup, it’s important to define compatible traits and values. Having an alignment in this area will facilitate the investment relationship, including attracting those who understand and like what you offer.
For my niche investor search, I created an investor persona similar to what a marketer would do when creating a customer persona. Think of it as my Match.com profile, except used for funding my tech product. It included the investor’s niche interests and expertise in my tech product segment. I also defined the values and principles that were important to me and my startup.
An important attribute I looked for was if they had a high passion for the problem my company was going to solve. Finally, the investor persona described the level of funding and involvement I wanted from that investor. Having these details helped narrow my search parameters to those investors most likely to match those criteria.
Start with friends and family outreach.
Who knows you and your new product best? Your friends and family. Start by reaching out to them and others you know who are already excited about what you’re working on. If they don’t want to invest or can’t right now, ask if they know of anyone who may be interested.
You just need one good bite in the beginning. It’s not surprising news that investors talk. One investor often leads to more investors. Most times, investors will tell their friends about a new product or opportunity to get them excited about it as well. Investors like to reach out to other investors because it helps validate ideas. And that’s a great way for you to get the ball rolling and build interest around your product.
Reach out to investor directories and marketplaces.
Numerous investors and investment firms have willingly added their names to online investor directories. Many of these directories have their own search engines. Enter your criteria to narrow the list to only those interested in your niche tech product.
After trying a few different sources, I used Invstor.com, but there are numerous investor directories and marketplaces that provide opportunities to match yourself with one or more funding partners. The best part is that most of these directories are also free to use. Doing your own Google search can also reveal even more potential investors that you should then research by looking at their websites as well as past and current investments.
Go where niche investors congregate.
Once you identify some potential investors, the next step is to go where they may be, including industry- or niche-specific networking events, conferences or product competitions/presentations.
For example, each year the Montgomery Summit invites startups to present their products and potentially come face to face with their ideal investors. However, there are numerous other startup pitch competitions and industry conferences that align with your niche tech product.
Although I did not personally use this tactic to identify and connect with my investors, I know of numerous colleagues who found this approach helpful because they could see and meet these potential investors to decide if they matched the investor personas my colleagues had created. Should you opt for this tactic, it’s also a good idea to be prepared to talk to the investors, so have an elevator pitch and demo ready, just in case.
Finding the right investors for your product can take time. But with some effort on your end, you can find the perfect investors for your tech product who will believe in your mission and help your product grow.