HOW TO FIND INVESTORS FOR AUTOMOTIVE STARTUPS - AN INTRODUCTION

This article will introduce you to several types of investors in an automotive startup, the best ways to find startup funding, how to find the right investors for your project, and the best ways to convince them of your vision with a compelling story.

Financing a giant project such as automotive startup funding is one of the largest challenges on the way from the vision to the first produced vehicle. As financing everything upfront is most likely not possible, the search for suitable – usually private – investors is one of the most important tasks for new players on the vehicle market.

Even more important, a secure financial basis is beneficial for winning them as development and manufacturing partners are interested in the long-term success of the project.

How to Find Investors to Support Your Vision

What exactly constitutes a “suitable” investment partner may vary from project to project. But what if the new entrant is literally starting from zero – without the funds required for those first studies? Equity crowdfunding and bank loans can help to fill the gaps during the first stages of funding, but they are mainly an interim solution until “proper” investors are found.

In the search for investors, it pays off to look out for private investors who are specialized in funding small businesses or start-ups with a large growth potential. These venture capitalists (or venture capital firms) usually encompass the majority of a new entrant’s investor portfolio. If one of them is willing to be an “angel investor” and bring in their experience – even better. 

But how do I find investors for my project? Approaching investment banks can be a good start. However, the easiest and most effective way is networking at industry events. This quickly builds a large network of people from the industry.

Working with SPACs to Accelerate Your Project

Financing an automotive vision is a challenge. Merging or being acquired by a Special Purpose Acquisition Company (SPAC) is an option to access public market capital if the automotive vision is sufficiently advanced.

SPACs accelerate the way to public market capital by bypassing the traditional initial public offering (IPO) route taken by established enterprises. Among new entrants in the early stages of their business, SPACs have become a very popular recently. A good understanding of the way SPACs work, as well as their benefits and the potential risks helps make the right decision.

Five Vital Cornerstones You Need to Win Investors for Your Vision 

Finding investors is key to success in the automotive industry – but how to win them over? New entrants need to convince investors that their vision has high growth potential and at the same time meets all expectations for a safe, stable and on-time development.

A captivating USP, solid market knowledge and a business case as well as comprehensive marketing and sales strategies are key to winning over investors to your idea. Combined with the necessary confidence in your abilities and your passion, you are ready for pitching your idea. Read more in our article "5 Key Arguments to Convince Investors of Your Automotive Project".