Meeting the Challenge of Finding Investors for Your Business

Ask any entrepreneur and they will tell you the biggest challenge they faced was finding investors for their business. Before you pitch investors you need to chalk out a business plan that will enable the investor to see how you plan to use the money and the milestones you plan to achieve.

If you have already done that, here are a few funding resources you can consider.

Startup Launch Platforms

There are several startup launch platforms  like  Startups.co and Gust that provide you convenient channels to find investors.   You can also consider joining startup communities like Google for Entrepreneurs, and Launch.co that will help you find investors for your business.

Crowdfunding Sites

Crowdfunding is an increasingly popular way of funding your business. Unlike other investors, on crowdfunding platform backers  are ready to invest few hundred to thousand dollars to finance the “next big thing”.  If you have a good idea, it won’t be hard to find investors willing to invest in your business.

Crowdfunding platforms like gofundme, Kickstarter, indiegogo are available to anyone to raise money for their projects.  The backers (folks who pledge money to bring projects to life) on these platforms support projects from diverse fields including technology, education, science, and social good projects.

Business Accelerators

Business accelerators are organizations that offer investment in return for equity. Startup entrepreneurs can join month-long programs  offered by accelerators. In these programs, accelerators offer office space, mentorship and supply chain resources to startup entrepreneurs and help  them in initial stages .

Accelerators are a treasure for startup owners due to the fact that they are run by experts who make a living out by helping businesses overcome initial hurdles.

Angel Networks

Angel Investors will not only invest in your business but will also offer  right advice and mentoring.  They also provide you access to their network that helps you reach more investors.  A typical Angel investment is around $25,000 to $100,000 in a company but it may also go higher if the product of the company is a must-have and the company shows high potential for growth in terms of revenue in next 3-5 years.

Private Equity Firms

Private equity firms are traditional investment options for entrepreneurs. They can give you access to a few thousand to million dollars in investment.  These firms give financial support to startups in their early stages.

SmallBusiness Administration

Government or industry bodies like Small  Business Administration in the US offer funding programs to entrepreneurs to stimulate the economy.  These traditional sources of funding offer small business loans and grants that might be exactly what you need.

These loans have fair terms and without any interference such as seeking equity in your business in return for funding.

Social Networking Sites

Social media platforms are not limited to get in touch with your friends. You can find many potential investors on sites like LinkedIn.  On these sites, you can get in touch with investors specializing in a particular industry or specific business segments.

Now that you know the funding resources, here are some things that you need to remember when approaching investors.

Things to Know Before You Approach Investors

Know Your Industry

It is good to believe in your business plan but experts say it is wise to study your industry to know about past failures and success.  This will tell you if your business idea is unique and if it has failed in the past, you can learn the reasons behind the failure.  It’s always good to do your homework before approaching investors.

Go for Realistic Projections

90% of the business plan focuses on dramatic initial revenue growth that seems hypothetic.  Angel Investors are not impressed by unrealistic numbers. Hence you need to use realistic projections while pitching to investors and then work hard to exceed them.

Backup Your Claim with Valuation

It is always a good idea to have your company valuation in place when you approach investors. It shows the company’s worth and investors will see the numbers supporting your claim.  Do not inflate your valuation as smart investors can easily see through it.

Finding investors is a tough task and you will fail more than you succeed. But you need to be persistent and believe in your business idea and keep looking for investors until you find right ones.