The past few weeks have been characterized by much optimism regarding the battle against COVID-19. This feeling may be justified, primarily based on the mass vaccination underway, but it only tackles the issue of human health. Financially speaking, there’s still a very long way to go till things get fully back on track – if they ever do.
Alt-text: Yes, some things are not going to go back to the way they were.
Economies have already taken the first big step toward recovery, recognizing the need to live alongside the disease. Among many things, this also means that some financial habits need to be modified following the pace that markets and industries are treading in (a rate slower than it was before 2020).
One sector that took a big blow and is still trying to find its path to recovery, is the entrepreneurship sector. Innovators need to work much harder to persuade investors to believe in their vision and subsequently allot their capital. If you’ve found yourself in this situation lately, here are three methods that may help you raise the money you need for your idea.
Make yourself relevant
Times have changed, and your pitch to investors should adjust accordingly. If you want someone to help you with your entrepreneurship, you need to make them see how it can change today’s world – not the one that existed two years ago – and how it can reap profits as a result. Tackling the issues of post-COVID-19 reality is a good start.
For example, if your venture is related to social habits, emphasize how you can help bridge gaps created by social distancing. Make sure you’re offering something that hasn’t already been put on the table. Don’t forget that you aim to stay relevant for the long run, which will probably be a reality where COVID-19 still exists (because it will not fade away, even once it isn’t such a health threat).
Alt-text: It’s going to be harder to convince them to invest in you. Harder, but not impossible.
Check out institutional and governmental loans
The private financial sector may not be an ideal place to turn to now. Even if tycoons have the financial means – and that’s a big ‘if,’ considering the blow they took in 2020 – this year, they’re going to think twice about every penny they put out. There are other options, though.
Financial institutions such as banks and hedge funds can fill this void. Fully aware of the situation, they offer loans and credit under more comfortable terms. However, the first place you should turn to is governmental bodies. As part of the effort to stimulate the economy, they sometimes offer grants and subsidies to entrepreneurs – or at least interest-free long-term loans. Check your eligibility and be ready with that pitch we talked about earlier.
Turn to angel investors
For anyone not familiar with the term ‘angel investor,’ let’s first understand it. Octavian Pătrașcu, a professional investor with over a decade of experience in developing companies and startups, explains: “Angel investors are people with the capital and the desire to help entrepreneurs and startups grow – at least initially. These are usually people with experience in investing and a will to see some of the shares from the profits at a later stage.
“Naturally, this means that the angel investor needs to believe in you and your idea,” this according to Octavian Pătrașcu, “They are also there for you in the earlier phases of setting up and growing, providing advice and sometimes even taking part in board meetings and brainstorming sessions, depending on the agreement signed by both sides.”
Alt-text: “We’re here for your idea when other investors choose to run away.” Angel investor Octavian Pătrașcu.
Can this be the solution for you? It’s a good start, but you must remember that an angel investor is not just a wallet. These investors are interested in taking part in your idea’s growth and in making capital out of your success. Accordingly, they might want to be involved in this process, and you must give them room to express themselves – otherwise, it won’t work.
Even in times like these, it is still possible to raise money to turn your dream into a reality. All it takes is creativity, a clear vision, and yes, also a lot of boldness. Good luck!