“How to attract investment in your startup?” is a question that has probably come up more than once if you have already started your own business. Finding resources for development is a key task for founders seeking to attract external investment to grow their company.
Success requires not only innovative ideas but also a clear plan, effective communication with investors, and an understanding of the specifics of financing. At the discussion “Just Energy Transition: Energy Transition in the Ukrainian Context” organized by Greencubator, experts shared valuable advice for startups preparing to attract investment. Greencubator has collected the most important tips for you.
1. Understand your business type and funding needs
One of the first important steps for startups is to identify their business type and funding needs. Ryan Grant Little, ClimateTech founder and host of the Another ClimateTech Podcast, emphasized the importance of distinguishing between tech startups and project companies:
“It took me a while to understand why people often ask if I run a technology company or a project company. This is an important distinction because venture capital funds are looking for new, revolutionary technologies that are being implemented for the first time. On the other hand, project investors prefer proven technologies that minimize their risks. It is important for startups to understand which category they belong to and adapt their approach to financing and communication with investors accordingly.”
2. Build investor confidence
Before attracting investment, founders must first gain the trust of investors and demonstrate to them that they are ready for funding. Experts advise:
- Demonstrate clear results: Show achievements, even at the MVP (minimum viable product) stage, to prove the viability of the concept.
- Tailor your communication: Appeal to the needs and goals of investors by emphasizing profitability, risk mitigation, and scalability.
Ryan Grant Little believes that the ability to tell a good story and personal communication can radically change the attitude towards the founder and his business:
“As part of the Invest in Bravery project, we brought 75 international investors to Kyiv. For at least half of them, it was their first visit to Ukraine. They were surprised to see people sitting in a cafe during the war, ordering a flat white and chatting calmly. The general perception of Ukraine in Europe and North America is that it is a war zone. But they saw that in many areas, business is still going on despite the war. Two months later, some of them were already at the stage of checking these companies and started making their first investments in Ukraine.”
3. Leverage the power of startup ecosystems
Getting funding from large international financial institutions, such as the European Bank for Reconstruction and Development (EBRD), can be difficult for startups. Such institutions are geared toward investing in more mature companies that have already reached a certain scale, says Konstantine Kintsurashvili, Regional Lead for Climate Strategy and Delivery at EBRD. However, ecosystems and accelerators can bridge the gap between early funding and larger investments.
Ecosystem organizations, such as Greencubator in Ukraine, act as connectors to help entrepreneurs grow. Greencubator founder Roman Zinchenko notes:
“It is critically important for major international financial institutions and local banking partners to provide ongoing support and funding to ecosystem organizations. They help entrepreneurs find their niche, launch their business, and scale it up to a level where major financial institutions such as the EBRD can recognize the strategy as viable.”
4. Start with an MVP and take the initiative
Develop a minimum viable product (MVP) instead of a complete solution. Test the idea in the early stages and improve it with feedback. Present your project in person, as your passion and clear vision will be the best tool for selling it.
“Don’t trust anyone to present your idea, it should be your role. These are your contacts and your connections. After you find a way to sell your idea, go to venture capital funds for money,” says Sergiy Shulga, owner and CEO of Mondial Solutions, founder of Prengi.
5. Start with an MVP and take the initiative
Simplify decision-making for investors, partners, or government officials. Prepare clear materials that highlight the key benefits: revenue, solving their problems, and positive outcomes such as job creation or investment. Use relevant data and stories that are relevant to their interests.
“Make it as easy as possible for people to say yes to you. Investors, energy companies, whoever it is. When I was building biogas power plants across North America, sitting down with the governor of the state, I took a press release prepared for them, where I had already spelled out how many jobs would be created, how much money would be invested. And also how much CO2 would be offset, although none of them cared about that, especially in 2007. Tell them how you solve their problems, not what you are interested in,” says Ryan Grant Little.
6. Have a plan and stay flexible
Drawing on her experience of working with communities in Ukraine, Margarita Zhenchuk, Climate Policy Project Manager at the Reform Support Team of the Ministry of Environment, emphasized the importance of resilience and adaptability in the face of constant change. She shared the example of the small city of Novovolynsk in Volyn, Ukraine, which made a significant transition from basic energy efficiency to numerous solar projects during the full-scale war.
In 2019, Novovolynsk developed a Sustainable Energy and Climate Action Plan that focused on modernizing buildings and improving energy efficiency. However, after February 2022, like all Ukrainians, the townspeople faced unpredictable threats and challenges, such as power outages. Despite the changing circumstances, the city was able to adapt quickly: they rethought their strategy and, thanks to access to new sources of funding, were able to install solar panels on three municipal buildings with a total capacity of 65 kW. The city has also launched a large-scale project for a water supply company with a capacity of up to 900 kW, and the number of solar panels in private households is estimated to have exceeded 4,200 kW.
Margarita noted that while strategic planning is very important for development, one must always be prepared to respond quickly to new circumstances.
7. Communicate applied value and the prospect of strategic scaling
Formulate a clear value proposition for your stakeholders. Plan to expand beyond the local market, creating conditions for growth and broader client base.
Konstantine Kintsurashvili, Regional Lead for Climate Strategy and Delivery at EBRD, emphasizes: “Think in advance about scaling a product beyond the local market – this will significantly increase its potential.”
- Watch the full recording of the discussion on Greencubator’s YouTube channel.
