How to Find Investors for Commercial Construction

If you’re a young construction company, it can be tough to find an investor. After a record year of financing for construction tech startups in the first half of 2015, a year later funding plunged by 26 percent.

Don’t be discouraged, however. Finding the right investor is not an easy task, but it’s certainly possible to raise enough funds for a commercial construction project. The construction industry of late has been shrouded in uncertainty, but as we settle into 2017, there are a number of major trends that can positively impact the industry over the coming years. As an entrepreneur, you will have to prove the potential of your concept to them, as well as your capabilities in running it effectively and turning into a successful project.

Now that you’re aware of what lies in front of you, you can go through some of the tips we put together that will help you find your future investors.

Identify potential investors
It can get incredibly difficult and confusing to know how to pick the investors to make sure you’re not wasting a lot of time. It can also be quite disappointing to be constantly turned down, especially if the potential investors don’t show much interest in your project while rejecting it.

That’s why it’s important to make a list of about 30-50 investors that you think are most likely to invest in your project. Ideally, you would want to only list investors that have invested in related projects, but not the ones that may be your direct competitors. 

You can then go to fellow entrepreneurs with the list, and ask them for their opinion on which investors on your list are worth doing business with. Some investors can be difficult to work with, and may not even invest actively, so fellow entrepreneurs’ advice can be a great resource for weeding out the bad options and identifying the excellent ones.

You can start the process by going through the already existing online  list of construction investors.  AngelList is a great way to research and find investors, as well as learn about them and let them learn about you. You can create a profile there and fill out all the important information, about both yourself and your company.

You can then share your profile with your friends and family, as well as your professional network, and ask them for references. It could lead to some followers, which will indirectly translate to better odds of finding serious investors for your project.

Initial communications
After you have created a list, the hard part starts: reaching out. Introductions are important; make sure your email does not sound like the same email blast that you are sending to all investors. Try a more thoughtful approach that shows that you have done your research.  For example, you could start off by saying, “I don’t usually send cold emails, but given your investment in Company X and your involvement with Project Y, I couldn’t help but reach out and introduce myself.”

Demand creation
In the process of seeking a business partner, remember that it’s a dual pursuit. Investors also want to find great companies to work with. It’s a two-way street, so take some time and put yourself out there. Besides creating a profile on an online listing as we mentioned earlier, there are a number of other ways you can make your voice heard. In the end, it’s up to you what will you choose.

Networking
You’ve probably heard this many times before, but networking, an important tool of any successful entrepreneur, is highly relevant in the construction industry.

The truth is, most good investors are inundated with pitches, so you might find it rather hard to get their attention. However, if you’re introduced by a common contact, it can go a long way in making them seriously consider your case.

Once you’re done finalizing your list of potential investors, try to find mutual acquaintances who can introduce you to them. Make sure to present your company’s potential to the mutual contact before they talk to the investor, as it’s important to make them feel that they are doing both, you and the investor, a favor by introducing you to each other.

Gari Nickson is the co-founder of GenieBelt, a construction management startup designed both for small businesses and enterprises. GenieBelt’s easy-to-use platform is used in more than 100 countries in around 5,000 projects. The company has raised $3.45 million funding to date.

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