6 Ways to Find an Investor for Your Business Idea

  • 6 Ways to Find an Investor for Your Business Idea

    The Best Ways of Finding Investors for Your Business!

    While most entrepreneurs won’t be crazy about the idea of getting an investor for their business, because why would anyone want someone else trying to take over their business. That being said, a business investor provides some or all of the funding you will need for your startup business. Finding investors is also a crucial part of starting up a business because at some point in time, when you decide to leave your nine to five job to take your business venture further, you will need the necessary investment for funding for business.

    The Truth about Entrepreneurship

    Most entrepreneurs who dream big simply don’t have access to the money which is needed to take their aspirations further. But in order to find investors for your business and make them open up their checkbooks, you will have to convince them that you are the real deal and worthy of their investment.

    Understand what Investors Want

    Most of the ideas usually lose their luster when transferred from brain to paper. If you decide that you can only take your business to the next level with the help an investor, then you will need to figure out what a backer will be looking for while investing in a business.

    Many entrepreneurs think that by simply talking to their investors they will get the loan that they need.

    You should know that when you are talking to an equity investor, you are going to be trading shares of your company which the investor can later sell off. For this purpose, you will need to show the investor that your company is on the rise, and is also on the path to a liquidity event.

    And since there are many companies that don’t usually go down that path, investors usually prefer to spread out their investments in several different businesses. Sometimes investors can even decide to invest in ten different companies, which means you will have to deal with competition and that you will have to prove your company is worth it.

    To do this you will need to ask yourself three crucial questions about your company;

    • Does your company's service address a large market?
    • Can your company scale quickly?
    • Do you have a defensible competitive advantage?

    Decide what Kind of Investment You Want

    Capital is capital, right? Well, not exactly. There are several ways in which a business can structure their finance in relation to its investors. Writing a business plan will give you a clear idea on the amount of investment you will need. The other question you will have to ask yourself is if the investment you are looking for going to be in the form of debt or equity. How long are you going to need the money is also going to be another important question to ask yourself. And do you looking for an investor that will offer more capital and will give you proper advice, or will you only need pure capital.

    A good way to find investors is by looking for projects which are similar to your own business model. Doing the proper homework and going through those websites and company reports will give you a picture of who’s out there and who can help you develop your business even further.

    Sealing the Deal

    Once you have successfully established yourself as trustworthy, you won’t need to go out of your way in order to land yourself the investment. You can take a look at these simple steps which can help you out in sealing the deal.

    Prove It Works

    Again, proving that your idea will work is going to be crucial for getting investment to your business. First of all, you will need to get an idea started and then achieve a bit of success, even if it’s minute, in order to show the investors that you are really on to something and that your startup business could be a success.

    Build Relationships

    It is also important to remember that every individual that you meet is a potential investor, so make sure you make a good first impression with everyone. Making good contacts will eventually lead you to the investors you are looking for.

    Be Likable

    No matter which way you cut it, the fact is that finding investors for your business is going to be tough from the start. But, there is no need to get disappointed, all you need to do is be likable. And the best way you can do that is by engaging people in a friendly way. Make an effort to look sharp if you’re going to meet someone for the first time, it will exude positivity. Investors usually choose to invest in businesses when they feel that they are being treated with respect and that you are trustworthy.

    Build a Solid Business Plan

    Remember that whenever an investor is searching for a new startup to fund they will be searching for the startups that will use the capital they receive properly. Again, having a solid business plan will make sure that you are set to go all the way and have a plan on getting there. This will boost your startup credibility.

    Many new companies have lots of raw energy, passion and a pointed mission, when it comes to driving their products or services in the market, investors look forward to providing funds for those companies. By answering a few simple questions you can make sure that your business plan in on track.

    Future-Proof Your Startup Business

     

    Okay, so you’ve thought of the perfect product and service that would fill a gap in the current business market. But your job isn’t done yet. For instance, investors do not only want to know how relevant your product or service is going to be to the current market, but how it is going to perform in future as well. So, future proofing your business plan by making your product a high quality one which will be needed in future as well is a great way to find investors for your business.

    Even if you do not have a proper business plan in place at the moment, showing the investors that your product or service is good enough to stay afloat in the future as well is going to be enough to get the investors listening and get you the funds you need to take your startup business to the next level.

    Check with Your Accountant and Your Attorney

    Okay, even though you might have a degree in business, make sure you use the services of an accountant and an attorney before signing on the dotted line. For starters, having someone on board who can review your decision will not only help you in making the right choice, but they can also point out some things that you may have left out in the agreement. Besides that, being in the profession, attorneys and accountants might also be able to refer you to other angel investors who they know and trust, so it’s a win win.

    Ending Note

    While many startups are able to find investors for their initial steps, gaining additional capital to take their business further is often a challenge. The truth is that getting the attention of the investors while trying to find the needed funding for business is hard. Always make sure to keep in touch any potential investors and leave an open channel between the decision makers.