LOOK FOR AN ANGEL INVESTOR TO YOUR PROJECT

However, while funding is the key goal behind finding angel investors for your automotive startup, it is not the only trait a new entrant should look for in an investor. As a new player within the automotive market, new entrants not only need to raise funds but also acquire experienced partners required throughout the entire project’s life cycle.

Finding an investor who can mitigate these shortcomings serves as a large stepping stone for entering the automotive world. This specific kind of investor is known as an angel investor.

Angel investors of automotive startups are investors who have already established themselves within the automotive market as recognized players. They are usually accredited investors who have a comprehensive knowledge of the vehicle market as well as an established  network of production partners, various suppliers and other private investors.

Similar to venture capitalists, angel investors specifically fund new players in the vehicle market if they have a promising business idea. Unlike venture capitalists however, angel investors are also heavily involved in the development process, as their primary role within the project is not only funding it, but to also bring their connections and experience into the project.

Angel investors provide a huge advantage for any new entrant, as they provide both funding and know-how, two of the major necessities during the early stages of an automotive startup. Thus, any new entrant should attempt to find angel investors for their automotive startup.

WHERE TO FIND ANGEL INVESTORS FOR YOUR AUTOMOTIVE STARTUP?

New entrants most commonly refer to investment banks in the search of investors for their automotive startup. These banks serve as mediators between investor and sponsee who take the new entrant’s pitch deck and present it to a portfolio of potential investors. Although it is a seemingly impersonal method, approaching such investment banks is a great first stepping stone for new entrants if they prefer a reliable method for finding investors for an automotive startup at the cost of some interpersonal connections.

And finally, the easiest and most effective method for finding investors for automotive startups is simply: networking. By visiting industry events such as motorshows, vehicle fairs or conferences about mobility issues, a new entrant can very quickly establish a large network of people from the industry. Such a network is vital for anyone who wishes to enter the market – and there is no method more efficient to find production partners, suppliers, peers and of course investors than visiting hubspots for industry members. Leaving a positive impression within such a network will make the market entry considerably easier. It cannot be highlighted enough how fundamentally important networking skills are for a successful market entry: visiting events and conventions and connecting with people should be every new entrant’s top priority.

TOWARDS THE GOAL OF YOUR AUTOMOTIVE STARTUP; ONE STEP AT A TIME

A common misconception about investors is that they are a largely passive factor within development: find investors for the automotive startup, pitch the idea, get financing, build the vehicle, see you on release day. And while investors may be varyingly involved in the vehicle’s progress, they are most certainly very involved in the project flow itself. A reasonable investor for your startup always keeps a certain degree of caution towards any project they invest in, particularly if it’s a project by an unknown automotive startup with a long development time to be released in a highly contested market. This means that regardless of how convincing a concept for a new vehicle sounds, no investor would simply provide the entire funding upfront. Instead, they will expect steady updates on the project’s progress, which ensures that everything goes forward as planned. Thus, a new entrant needs to regularly present their status quo via meetings and new project pitches in order to keep up a continued flow of money by their investors. If they are unwilling or unable to do so, investors will over time lose trust in both the new entrant and their vision’s success rate.

YOU'VE FOUND AN ANGEL INVESTOR? WHAT'S NEXT?

In some aspects, finding investors is very similar to finding other partners for your automotive vision. In both cases, it’s important to convey a sense of reliability and competence, but also be able to create interest and raise passion in a potential partner. A suitable investor will always share commitment to a project that goes beyond profit margins and revenues.

Ultimately, the search for investors is a search for people who fit into the project: they need to share a general interest in the matter at hand and they will be just as invested within the development process of the vehicle as other partners. And that’s the key: investors may not build the vehicle, but they are engaged and involved partners that will join the road and share the dream of realizing an automotive vision.