Once you’re ready to start looking for people to inject funds into your business how do you find those investors in order to start your business? It’s a good question!
Who to ask and where to look
Investors are everywhere and when you’re first looking for investment for your business you may find that they’re on your doorstep or even in your home. The key to success is in your own resolve when it comes to asking for help.
Before you start searching for investors
Before you start searching for investors make sure that you have all the information they’re likely to need ready for your pitch. You never know when you’ll meet someone who asks you questions on the spot.
You’ll need to have a sound business plan detailing the gap in the market that you’re filling, how you’re going to do that and why it will be a success, your current financial situation and your projections. Stick to the facts, show your research and make sure you know all the details inside and out.
Finding investors in friends and family
When you’re starting out there are a number of stages to the amount of investment you’ll need.
While you may skip one or more stages generally there will be a period during which you need little outside help – while you’re enhancing your idea and drawing up your plans – and then a period when you’re building things up, when again, you won’t need the funds that you may eventually need to optimise your productivity and grow.
During the first stages, you may find that your friends and family can help you with investment. This may make financial sense in terms of repayments and for some companies. It also makes for a stronger management team. However, for others, it can create difficulties as lines are crossed and business decisions are questioned.
Finding investors in the business environment
If you need greater financial help than your friends or family can give you, or if you would prefer to keep things ‘strictly business’, finding investors from other businesses can be useful.
Your own network will be incredibly valuable here and, before you approach anyone, get a second opinion from a mutual acquaintance to make sure they have the knowledge, skills and finances necessary to help.
You should also think about who will benefit from your business in the local environment – is there a synergy with other businesses who could profit from your activities?
Angel investors and venture capitalists
While you may be looking for angel investors and venture capitalists at different stages of your funding cycle approaching how to find them is much the same.
As with much of your business planning research here is key. Network with other entrepreneurs and ask them who they’d recommend – this is especially useful if their businesses are similar to your own. They may even be ready to invest in your business themselves, so be sure to position your business well to them. The local chamber of commerce may be a good place to start.
You can also research angels and venture capitalists online through organisations such as UK Business Angels or the British Venture Capital Association. When you search online for ‘angel investors’ or ‘venture capitalists’ you’ll find a good selection of lists to research.
Finding investors for your limited company
You want to find investors, but they also want to find your business. So it’s important to make sure you take every opportunity on offer to raise your company profile and send your message to them. Social media platforms can help a lot here. Taking the time to invest in your own reputation as a business leader and your company’s profile is essential to finding a good investor.
As with all business efforts when you’re looking for the right investors you also need to be prepared to be turned away. Success often lies in perseverance, so always make sure that you follow up professionally and whenever seems timely.