It is a well-known fact that starting and even growing a business requires a lot of capital. Even though bootstrapping with personal savings or credit is possible, most of the owners require outside capital to grow the company in a significant way. Sponsors can offer the startups the funding they require to scale up operations, acquire talent, or introduce new products and services to the market.
In addition to providing necessary funds, the appropriate sponsors also bring credibility, connections, and marketing opportunities. Having a reputable backer for your startup means that you will encounter less resistance, and more chances will be presented to you.
However, the search for startup sponsors is not as easy as one might imagine. It takes the right tone, contacts, and determination to persuade people to invest in a new business venture. This article seeks to outline five best practices for looking for sponsors to help scale up your enterprise.
Why Startups Seek Out Sponsors
Before digging into tactics, it’s important to understand why early-stage companies actively seek sponsors and what those backers bring to the table.
Get Financial Support
Ninety percent of startups fail in the long run. Put differently, the survival rate of traditional startups is only 1 out of 10 in the long run. One of the most common reasons is lack of funding.
The most obvious benefit sponsors provide is direct financial support. An infusion of outside capital allows startups to get their core operations off the ground and fund growth plans. Sponsors help cover costs like:
- Hiring key staff and advisors
- Office space and equipment
- Inventory and supplies
- Software, tools, and services
- Research and development
- Marketing and advertising
Without adequate financing, most startups fail to achieve meaningful traction. But with the right sponsors, you can fuel sustainable scaling.
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Increase Startup Visibility and Credibility
In competitive markets, consumers and business partners must be aware of the brand and have confidence in the brand for sustainable business. A Lucidpress report shows that revenues can improve by up to 23% when brands are aligned across all channels. But as a newcomer, as a startup, gaining recognition and, thus, gaining people’s trust is a daunting task.
But by partnering with respected established sponsors, you immediately tap into their goodwill and credibility. Cunning startup businesses ensure that they promote the sponsor partnership on their website, press releases, product labels, and other places. This shifts the loyalty and the association of your backers’ names to your new brand, which is still unknown in the market.
Still, over the course of years, startup founders need to demonstrate their value. However, sponsor credibility provides instant credibility that can help in getting a foot in the door with potential customers, business partners, and talent.
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Grow and Develop Your Startup at Scale
Finally, the right sponsors don’t just write a check and walk away. They have a vested interest in seeing your startup reach its full potential. Many deliver hands-on value that dramatically accelerates growth, such as:
- Strategic advice and mentorship
- Warm introductions to their network
- Distribution or sales support
- Co-marketing partnerships
- Board seats and governance
Essentially, respected sponsors can guide startups through inevitable growing pains to scale smoothly and strategically. Their expertise and connections enable founders to punch above their weight class early on.
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How to Find Sponsors for Your Startup
Now that the immense value of startup sponsors is clear, how do enterprising founders actually secure that crucial support? Use these proven tips and tactics to connect with potential backers.
1. Invest in a Well-Made Pitch Deck Design
Your sponsorship pitch deck is one of the most pivotal touchpoints for attracting startup funding. This visual presentation quickly communicates your core business concept, traction to date, and future potential.
Given limited face time with prospective backers, your deck must instantly grab their attention and hold it. A few key pitch deck tips include:
- Lead with a powerful, benefit-driven tagline
- Emphasize large market opportunities
- Share evidence of early commercial success
- Introduce your startup’s unfair advantage
- Provide realistic financial projections
- Close with a clear call to action
Also, consider hiring professional pitch deck designers who can help to make a presentation with all details to find sponsors. Visually compelling slides with smart use of color, photos, charts, and layouts make better impressions than basic text-heavy decks.
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2. Become a Niche Speaker at Industry Events
Industry conferences and seminars deliver prime networking opportunities with many potential startup sponsors concentrated under one roof. However, randomly working in the halls is unlikely to capture their interest.
Instead, apply to present at relevant events. Deliver a compelling talk on a hot niche topic aligned with your startup’s focus. Conference organizers are always seeking fresh speakers with unique perspectives.
If selected, you instantly elevate your brand and credibility with attendees. Also, audience members proactively approach speakers post-presentation for further discussion. This gives you prime captive access to relay your startup’s mission, and the sponsor asks influential figures genuinely interested in your viewpoint.
3. Rely on Your Network and Partners
Beyond cold calling potential sponsors, turn to connections already familiar with and hopefully confident in your capabilities. Ask colleagues, advisors, investors, clients, vendors, friends and family for sponsor introductions within their networks.
With a direct referral, you bypass cold outreach and qualify for warmer conversations with those sponsors. This gets your foot in the door faster, armed with social proof from a contact they know and trust.
You might also explore sponsorship opportunities with existing partners deeply invested in your success like key investors, advisors, or vendors. They already believe in your vision and stand to gain through your growth.
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4. Give Crowdfunding Platforms a Try
Popular crowdfunding platforms like Kickstarter, Indiegogo, and GoFundMe allow startups to raise smaller chunks of capital from every day “crowds” rather than institutions or high-net-worth individuals. According to Bloomberg Live, the global crowdfunding market is projected to reach $300 billion by 2025, indicating a significant trend toward alternative funding methods for startups.
But beyond financing, many crowdfunding sponsors also support startups they resonate with to gain early access to novel products and services. And most campaigns offer tiered perks to sponsors at ascending contribution levels.
So, instead of just asking for money, view crowdfunding as a way to build an engaged community rallying around your brand. This viral momentum attracts wider attention from sponsors beyond just initial backers.
5. Spy on Other Startup Competitors
Research direct competitors and similar startups in adjacent spaces that have successfully secured outside sponsorship. Investigate their funding history, backers, pitch messaging, sponsor benefit packages, and other factors that likely clinched the partnerships.
Then analyze if any of their backers also serve related industries and customer profiles that your differentiated offerings could mutually benefit. This secondary research sharpens your sponsor targeting and value proposition arguments.
You can legally leverage competitors’ public information to model what works and fine-tune your own sponsorship quest. Just don’t cross ethical lines into plagiarism or misrepresenting strengths as equivalent to rivals further along.
Conclusion
Sponsors act as fuel that propels startups from being scrappy disruptors to becoming stable industry participants. Their capital, skills and networks are the enablers that are needed to fund and grow businesses at a very fast rate.
However, getting startup sponsors requires much more than simply asking for funding. It is necessary to develop a persuasive vision and value proposition for potential investors, who will see tangible benefits from their investments. This entails critical analysis, strategic placement, resilience and networking abilities.
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