How to Find Investors
An entrepreneur’s guide to finding outside investors. You’re a fledgling company or startup CEO, you’ve come up with a business idea, and made the decision to start a business venture. Chances are, once you’ve decided to begin your endeavour, you’ve considered the fact that a lot of personal assets and commitments are required to get started; not forgetting late nights, cutting off friends and having stock options in commodities like coffee beans.
Starting out for yourself might involve selling assets, borrowing against your home or maxing out credit cards; however there are other options open to you which you may or may not have considered, so without further ado, let’s take a look. How to find investors is something most entrepreneurs start with by dipping into their personal assets to finance their start-up, often leveraging credit cards, or god forbid multiple credit cards. It’s an unfortunate aspect of starting a business due to the risk management involved, but it’s also the first step to earning the interest of angel investors. It’s a good idea to get the ball rolling with operations as quickly as possible to earn the trust of outside investors. They want to see that you are committed. Having a well thought out business plan is essential to show that you’ve thought out all the necessary aspects of the business. Here are a few alternatives for entrepreneurs to consider when determining how to find angel investors.
Angel Investors
Turning to angel investors can prove to be difficult – they chose to remain anonymous, and typically only invest relatively small amounts. If you do choose to use one, be sure to refer to a high quality angel investor pitch deck.
Friends and Family
These are the people who know you best. For this reason, they may be the ones most willing to lend. Be sure they’re aware that their investment is highly risky. You wouldn’t want to damage any relationships with the people you care most about.
Strategic Partnerships
This is probably your best option. Investors that are part of angel investor networks set aside funds for investments, which are screened by a team who source deals for the network. This way, the individual investor maintains their anonymity and have the comfort of a team of managers who can do due diligence on investment targets. This means that the group is able to invest larger funds to the start-ups they prefer. Therefore, it’s easier for the entrepreneur to raise the full amount necessary, rather than contacting a single investor. As with any strategic partnerships, use an angel investor network to identify opportunities and build momentum. Always be careful when negotiating terms to ensure all parties stay on course. As you can see, entrepreneurs have many things to consider when it comes to financing. First, they should consider individual angel investors. Friends and family is another option. Forming a strategic partnership with an angel investor network is probably your best bet. I hope you’ve found this post helpful.