Finding Strategic Investors

by Adam on June 4, 2013

The recent panel I was involved in during Internet Week related to funding for food + tech companies got me thinking about the opportunity for finding investment. Many fundamental questions arose during that session around how to find investors and what to look for that I thought a quick run-through of some high points might be useful. This is by no means an all inclusive list, but should help set interested entrepreneurs on their way.

  • Know where to look. There are a lot of resources out there for fundraising and entrepreneurs should watch them all. Food + Tech Connect has a great monthly newsletter that sums up M&A and investment activity in the food space. VentureBeat also provides great how-to articles on fundraising. Also keep close tabs on Angelist.co and Crunchbase to find out about new investments going on in food, who the investors are and what’s getting funded. 
  • Money is only one piece of the equation. When trying to find investors, don’t just look for money. Ask yourself what each investor brings to the table. Does s/he have specific industry expertise in food? More specific in your particular niche? Does s/he have upstream connections to other investors? What about strategic partners? What else are they offering? Be sure to look for smart money in all cases.
  • Niche investors are becoming the norm. While the days of the horizontally-oriented VC are still prevalent, more and more (especially in food + tech) investors are taking the form of strategic or niche houses. Some examples of this are food-related companies that have separate venture investing arms (but mingle that with their food expertise), as well as investors that are only focusing on particular sectors, including food.
  • Put yourself out there. Outside of the usual social networks, make sure you are using investor specific social networks such as Gust and Angelist to get yourself out there. You won’t be found out if you don’t have something that people can find.
  • Don’t be afraid to talk it up. This is similar to the above. I’d say a large part of the success of startups is their ability to talk up their business and get others engaged and interested. This leads to new conversations and opportunities. I hear from a lot of startups who are afraid to share their ideas for fear that someone will steal them. If that’s you, I will tell you that there is a saying…”startups don’t starve, they drown.” This is no limit to the creative ideas that entrepreneurs can come up with, and it’s far more likely that an entrepreneur has had 50 different ideas to pursue and has settled on one and is going for it in full force (which makes him/her far too busy to steal yours).
  • Find complementary examples. If you are looking out at the major media sites related to food investment, try to find complementary businesses that are getting funding and see who they raised money from. You can even contact the entrepreneurs and see if they would be willing to make introductions to their investors.

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