How to Find Investors for SaaS Startup?

 

Investing in SaaS is not something that every investor will like. Target investors for SaaS startup who can provide funding at your geographical and startup stage. More importantly, focus on the ones who are interested in SaaS investment. 

Investing requires research. So, get to know investors before contacting them. 

How you address your tech investors is of paramount importance. The key is to understand how to make a message that will convert and lead to a meeting or a deal.

Because we have something more practical for you, we won’t spend time explaining the differences or similarities any further. To put it simply, you are about to discover:

  • How many types of SaaS investors are there?
  • What stage of a startup do they invest in?
  • How do you find angel investors and venture capitalists?
  • In what ways do potential investors expect you to provide information?
  • What do you need to know about designing a perfect message and pitch deck?

Continue reading below if you wish to meet with a potential product investor face-to-face and increase response rates.

How do you Decide between Angel Investors and Venture Capitalists? How do they Differ from Each Other?

In this case, the word “angel” is not an adjective that is used at random. Entrepreneurs who invest in a risky early-stage company without a finished product or customers in sight are usually angels. The first characteristic of a startup is that it needs funding before generating revenue. Usually, allocated funds are between five and six digits in size.

A second characteristic of investors for SaaS startup is that they are generally wealthy individuals who contribute their own money.

Additionally, they can mentor and assist you with your business activities. In general, angel investors receive 5-15% of the equity of your company.

Millions of dollars can be allocated by venture capitalists. Since they invest in startups with high growth potential or previous results, their investments are less risky.

An equity stake of 20-30% may be taken by venture capitalists.

What Stage is your SaaS Startup in?

Knowing your startup’s stage is crucial to finding the right product investor. You will find dozens of confusing and complex classifications on Google or YouTube if you search startup stages. Let’s begin by seeing which stage best suits your current situation:

  • The idea – As you may have guessed, your startup is only a thought at this stage. Team, product, and revenue are all absent, along with investors. 
  • Pre-seed – This stage involves developing ideas and preparing them for product development. Without funding, you can’t survive. The only people who can help you bootstrapping (financially) are you, your friends, and your family. It is also possible to get support from early-stage angel investors. In addition, there are startup accelerators.
  • Seed – Now you now have a proof of concept. You have your MVP (Minimum Viable Product) ready and are gearing up to get feedback from users and testers. Even if your company lacks revenue, angel tech investors and early venture capitalists may be interested in it.
  • Round A – At this stage, angel investors are less likely to get involved, and venture capitalists should do the heavy lifting. There is at least some traction and revenue behind the product that you have developed.
  • Round B – Leave your angel investors behind for this round. Now, look for VCs at this stage if you are trying to raise 7-8 digits of funding. As you generate revenue, your traction increases.
  • Round C – Congrats if your startup has made it this far. Why? Because now, it is among only 8% of startups that did not fail within the first three years of their operation. 

Where to Find Investors for SaaS Startup?

There are more than 15,000 results when you search for “venture capitalist” on LinkedIn. Google will give you over 270,000 results if you search for “angel investor.” Despite these encouraging key SaaS metrics for investors, browsing their profiles and seeing which industries they prefer to invest in is quite time-consuming.

Here is a list of some renowned platforms you can use to access large databases of investors for SaaS startup.

  • AngelList – A US-based web platform that connects startups with angel investors. Investors list their companies and provide details when you will list your company and add details. Investors from Europe will be more interested in working with businesses in their region, so filter your potential partners by region.
  • Angel Investment Network – Another platform for registering, adding your pitch, and finding investors. Investors can be found along with their investment amount, area of expertise, and location. Also, if you select your country, you will find more relevant SaaS metrics for investors.
  • Gust.com – Another investment networking site with over 80,000 members. Your profile allows you to apply for SaaS investments and receive recommendations.
  • Y Combinator – Applicants can apply on this network regardless of their startup stage. Each year, they fund startups from around the world in two batches. The next application process can be found here.

While tech conferences abroad can be costly, the benefits make them a worthwhile investment. During an event, everyone has one goal: to expand their network. Interested investors for SaaS startup come voluntarily to hear about your vision. An ideal environment for physical engagement and tete-a-tete conversations.

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