When starting your business, you need a viable business plan and determination of how much you are likely to plant into the business for profits in future. Sometimes, raising the money on your own can be a challenge. For this reason, you should determine the amount of funding you need and eventually embark in a mission to search for potential investors.
The fact is looking for an investor is a scary step but when you are prepared you are likely to find investors with ease. To make sure you will find an investor for your startup, we have shared different routes to consider. Before we proceed, just bear in mind that you will need to talk to hundreds of investors before you land a nice deal.
Ways to find an investor for your startup
I have personally seen many founders of popular businesses that actually used the below methods and they ended up with worth investors for their business. So, if you follow the below ways, you can equally find a potential investor for your business.
Friends and Family
The first consideration you should take is to get an investor from within your family or friend zone. This is one of the simplest ways because you know all of them and their abilities to help you scale your business. So consider your parents, siblings and other relatives.
Just remember that family is the same avenue that can kill your dreams. So when you are sourcing funding from them, make sure you retain your business decorum and professional relationship with them.
You should also make them understand the risk of investments. This way, you will not lose them when the money is lost. However, put enough efforts to make sure the business is a success.
Crowd funding sources
There are several crowd funding sites that offer you an opportunity to connect with different types of investors. In this regard, you can get investors from the general public or just opt to participate in the next big thing which includes Pererbackers, Kickstarter and Indiegogo.
The other method is the philanthropists who can actually help you to realize your dreams. There are also many accredited investors here that are seeking new ideas to fund. You will find many Crowd funding sites out there but each of them has its own way of incentivizing investors. What this means is that you should spend enough time studying each of them to determine whether you can be helped.
Online Lending Platforms
Although these platforms cannot be at a position to lend you millions of dollars as you start, they can actually help you grow. Many people are turning to Online Lending Platforms because there are many restrictions involved in getting bank loans today. Online lending platforms can either be peer-to-peer platforms or non-traditional lending sources. Some examples of online lending Platforms are OnDeck, Lending Club, TrustLeaf and Prosper.
Incubators and accelerators
Now that you are starting up and taking your startup business as a baby that you want to grow up, you should work with an incubator or accelerator for it to flourish and grow. This gives you a pool of potential investors that will watch your business grow. In most cases, the accelerators and incubators may offer you a free physical space where you can set your business. In most cases, the spaces within the same building are being used by other investors a reason why you can grow fast after exchanging ideas and holding hands.
You can as well go for traditional sources for funding. There are many traditional sources but the most popular is the Small Business Administration. These sources usually offer small and starting business loans and grants to help them grow. In several instances, they stake on your business and get returns when your business grows.
Private equity firms
You can actually go for private equity firms that can give you access to money when you are starting. They can give you few hundreds or thousands of dollars to start your business. Their idea here is to sell their stake and wait for profits in the coming years. Statistics from Private Equity Network shows that in 2012 only, private equity firms invested something to do with $347 in about 2,100 companies in the US.
Social networking sites
Talk about LinkedIn and many other professional social networking sites. All these sites can help you land a potential investor for your business. So you don’t have to worry about it so much when you can just create a LinkedIn profile or contact investors directly. The main reason why we have these professional social networking sites is to connect entrepreneurs with all types of investors for their startups.
Most of these sites can as well connect you with investors from other countries. The fact remains that there are many investors that wants to be part of the global business market. What this means is that they actually wants to start investing internationally.
Personal Marketing Effort
If the methods mentioned here cannot help you, then you can embark on personal marketing efforts to attract potential investors. You just have to put yourself out there where the investors are bound to find you. Talk about participating on Social gatherings, getting out to Business dinners and many other methods. You can also start a website to tap investors or expose yourself through guest posts or even through social networking sites.
Don’t be surprised that your requests will be put down several times. You will as well meet many investors and people along the way that will discourage you. So, don’t be discouraged, I am sure there’s a reason why you are looking for an investor and that should be your moving force. You will be flat-out rejected not once, not twice but many times. Regardless of the feelings, try; try again and again until you find someone that will give you psychical funding and emotional support as you go along the whole process.