The IoT landscape is dynamic, diverse, growing rapidly and full of innovation. Little surprise, then, that it is also a favoured space for business investors. If you are seeking external funding to help your business grow, the IoT is a great sector to operate in.
Nevertheless, investment is never guaranteed – particularly if you have a specific target organisation in mind. Similarly, the IoT market’s very dynamism can be a challenge; there are countless startups vying for attention, and competition is fierce. How, then, can you ensure that you stand out from the crowd and position yourself as attractively as possible to a buyer or investor?
Perfect your product
Your product is, of course, the core of any investment deal. Creative branding, an impressive team, the latest manufacturing equipment – any and all of these things can help secure investment, but they are wasted if the product underneath is flawed, problematic or simply not standout.
So what makes an investment-worthy product? Whilst you don’t necessarily need to have come up with a brand-new concept – many successful products are simply a refined version of something that has gone before – your product does need to offer a certain amount of marketplace disruption in order to appeal to investors. It also needs to offer a clear route to monetisation – many new IoT products demonstrate innovative and exciting applications of connected technology, yet fail to offer tangible business or consumer value which can convert into sales. And it should have gone through multiple rigorous testing phases, not just to perfect its capabilities but also to gather feedback from end users and enhance it accordingly.
Develop your business plan
Your product is your shop window, the shiny advert to entice potential investors in and capture their imaginations as rapidly as possible. Your business plan is your roadmap, the detailed explanation of how those potential investments could generate return and therefore the element that converts interest into action.
As such, your business plan needs to be both detailed, and immaculate. Financial projections are clearly critical, but these need to be underpinned by a clear explanation of your target customers, how you are going to reach them, and what the growth potential of that customer group is. This information is what transforms your financial projections from dreams and imaginings to tangible action, and enables potential investors to see how their money could grow.
Explore multiple funding sources
When it comes to actually getting in front of potential investors, there are lots of different options. Online platforms and communities are a great place to start, but don’t shy away from face-to-face to events, particularly if your product is physically attention-grabbing. The IoT World Forum, held in London, is a great place to start. Networking is very often the first stage to securing investment for a genuinely interested and supportive party, but it demands that you attend the right events and learn how to explain your business eloquently and concisely.
The investment sector itself has been subject to disruption in recent years, so don’t limit yourself to traditional angel investment and venture capitalist structures if you don’t want to. Crowdfunding websites such as Kickstarter and Indiegogo for example, have played a major role in plenty of IoT success stories, including Dash, the smart earphone firm, and the Tile app locator. They are simple to access and allow you to reach a huge volume of potential investors very easily.
Securing funding is one of the most exciting stages in the lifespan of any startup, and can turbo-charge your IoT business. The competition is fierce, but the basic principles of securing funding are remarkably simple. Focus on your product first and foremost, ensure that your business plan is watertight, and understand and explore the investment landscape in as much detail as possible.