Like the Internet, innovations in robotics and artificial intelligence are increasingly affecting the global economy and society. Now is the time for venture capital funding to flow to tomorrow’s technology leaders.
Today, industrial automation performs at least 10 percent of manufacturing tasks. By 2025, its application in the manufacturing sector is expected to reach 40 percent, according to a report by Bank of America and Merrill Lynch.
Ark Invest’s “The Future of Automation“ report predicts that at least 50 percent of U.S. jobs will be automated by 2035. Growth in real GDP resulting from automation is expected to double, from $113,000 in 2013 to $236,000 in 2035 per worker in the U.S. alone.
Investments in robotics have been increasing steadily at a 17 percent annual rate in the U.S. In 2015 alone, venture capital funding for robotics stood at $922 million, about three times the amount raised in 2014.
Despite these trends, robotics funding is still low compared to the growing demand for robots, drones, and other forms of automation. To cope with this demand, robotics companies need help from brave investors as they develop new applications for these technologies.
Here are four ways to attract venture capital funding for robotics from venture capitalists:
1. Identify a specific niche
Robots are incredibly resourceful. Mobile robots and manipulators can automate tasks in different markets, including construction and materials handling. Identifying a specific niche allows entrepreneurs to develop better products and monitor the market’s response.
It also enables them to identify venture capital firms that want to invest specific types of robots. Having a specific niche makes it easier to prepare and present a business plan that VC firms understand better.
2. Assemble quality teams
Venture capitalists invest in teams rather than business ideas or products. To attract venture capital funding, you need to provide assurance that the invested amounts are in the right hands. Quality teams display the passion, tenacity, commitment, teamwork, and knowledge required to run a successful projects.
Also, VC firms tend to invest in businesses that are more established while trusting the capability of more experienced entrepreneurs.
Robotic companies seeking investments from VC firms must hire professionals who can deliver results. This does not mean firing original founders who may not have the necessary experience. Rather, it means hiring people who have experience, a record of success, and an understanding of the business side. They can help steer the company in the right direction.
3. Collaborate with marketing teams
Sometimes entrepreneurs think a good product is all they need to succeed in business, but much more is required. Besides developing a good product, marketing is critical to increase sales. Founders of many startups in the robotics industry are either engineers, inventors, or developers. They often have little to zero knowledge or experience in marketing.
A greater, in-depth collaboration with quality marketing teams helps increase the visibility of a product. Marketing creates public awareness of the product and the company.
Through marketing, entrepreneurs can monitor responses from the market about a product and suggest adjustments to boost sales. Having a good marketing team in place will impresses those providing venture capital funding. It builds their confidence that profits will be realized and guarantees them of a return on their investment.[note style=”success” show_icon=”true”]
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- Funding Matchmaker Connects Robotics Startups, Investors
- Robotics Firms Garner Funds for Converging Technologies
4. Let venture capital funding lead into uncharted territory
As an industry, robotics is fairly young, with most developments focusing on the manufacturing sector. Relatively few companies have explored use cases such as pharmaceuticals, toys, retail, and personal assistants.
Robotics entrepreneurs need to pursue these markets to attract venture capital funding. VCs often opt for disruptive businesses. They invest in unique products that change how people think and offer benefits to society. Venturing into the uncharted can increase opportunities for raising funds in the robotics sector.