Given the rise of AI startups, many of you may be inspired to make your own. After undergoing a process of finding what you wish to base your startup around, wrote code, built up a team, along with all of the other necessary steps to build an AI startup. Now, for more ambitious projects that will require quite a bit of funding, you may be interested in pitching to investors to secure venture capital.
What is venture capital? It is simply a form of investment (private equity financing, through stocks and shares held privately), for companies starting up, that show potential for high growth. It is estimated that 80% of AI projects fail, and for some of these, funding can be that issue. To prevent this, here are some ways that you can secure VC funding for your AI startup.
-
Having a strong sales pitch - this is hugely important as it is what hooks investors in, if it is done right. This is where you show the contribution or even breakthrough that your startup can bring about, and show investors why they should put their money in you
-
Research the different companies or investors that may offer you VC - to prevent conflicts or terminated funding down the line, it would be more appealing for different VC firms or investors to invest in you if your and their goals and visions align with theirs, although this is not a requirement
-
To build on to the previous point, it is good, and in the context of an investors’ pitch, important to have a long term future vision, which will help you to manage that investment and retain interest of investors
-
It is important to know what type of VC you are applying for, whether it is seed funding, or series A, B, C, D or E funding - it is important to know the difference so as to better enable you to seek out the right funding and investment.
-
Display your current work to potential investors - while you can promise innovation and delivering an exciting new product, it can certainly be reassuring, as well as more tangible, for investors to see proof of concepts, prototypes, MVPs, etc
-
Financial records and metrics provide a level of reassurance to potential investors - here they have a more tangible and transparent view of whether you will be able to deliver value for your stakeholders
Overall, these are some ways to get you started on looking to secure venture capital for your AI startup. However, you should be careful as investors and VC firms will calculate the benefit to themselves to invest in you. Given how many AI startups have recently been created, you wish to show how you are able to rise to really attract investors’ attentions.