Finding A Suitable Investor for Your Start Up Business

Growing a small venture is a daunting task. The journey is murky, but worth it in the long run. Capital is what accelerates the business to higher heights. If you have already made an appealing business plan, the next step is looking for source of funding.

Inventors are always looking for lucrative businesses. However, business owners have to search for potential investors.

The Following Hacks Will Help You Get the Right Investor for You

a. Look for an investor near you

Since an investor will stay by your side, it is advisable to choose the one near you. There are a couple of benefits to choosing an angel who is near you. He will be required to maintain a strong relationship with the company principals.

b. Utilize the Connection Services on The Internet

Through online websites, you can quickly hook up with an angel investor. The website owners have tailor-made their services to provide you with an investor who matches your needs. Be aware that the website does not provide funding; they are just a link between potential angel investors and interested startups.

c. Concentrate on Networking

In most cases, you need to meet people who will connect you with angel investors. They will not come directly to your doorstep. To find one, you need to know people who are well vast in the industry. When networking, familiarize yourself with business owners. They might be potential angels or know an angel who can fund your business. You can meet business owners by attending business meetings and joining trade organizations. Make it a habit to attend events and trade fairs.

Who Are Potential Investors for Small Businesses?

These are individuals who have a passion for financing startup businesses. However, they offer a small amount of capital. When looking for an investor, look for the one who has honed skills in the industry. Many investors provide advice and guidance since they have done what you are about to do. Below are various options for financing to startup businesses.

1. Individual Vs. Groups

Some individuals invest alone, while others do it in a group. Most people view investing as risky and expensive. Therefore, they tend to minimize losses by investing as a group. All you need to know is that you can find small business investors in a group or get funds from one person.

2. Startup Launch Platforms

This is one of the key ways to connect with investors. Companies have come up with platforms where they provide information, assistance, and ways to connect with investors. Through these platforms, you can follow simple steps in order to connect with investors. Reputable start up platforms provides state of the art opportunities which will help you secure both funding and mentoring.

3. Crowdfunding Platforms

Through these sites, you are exposed to a wide range of potential investors. Investors can be people who want to be part of your dream or philanthropists who take pride in helping others attain their goals. Rules of crowdfunding sites vary from one site to another. You have to study each carefully and choose the one that fits your business.

4. Angel Investors

An angel investor will not stop the bus at offering finances; he will go on and provide a leaning shoulder. A mentor will advise and connect you with people who can assist you. Most angel investors have made a name in providing finances for small businesses in a particular sector. Some platforms will show you angel investors who are near you.

5. Family and Friends

Finding funding from a friend or a family member is the most common source of financing. However, they must believe in what you are doing and be passionate about it. When using this kind of funding, be cautious enough to keep the professional and personal relationships separate. This can be done by doing things formally in writing. The investor should also be aware of the risks involved in financing a new business. This will ensure that if a loss occurs, you will not lose your personal relationship.

However, don’t be discouraged if your friends and family turn down your request. Keep trying until you find the right investor who is passionate about what you are doing.

6. Personal Marketing Effort

Besides finding investors, keep on advertising your business. Furthermore, your main goal is to grow your business. Put yourself in the limelight so that potential investors can notice you. You can market yourself by creating a website, guest posts, blogs, and through social media platforms.

7. Think of Online Lending Platforms

Securing a bank loan is a tedious and lengthy process. On the other hand, online lending platforms have few restrictions. Unlike traditional lending institutions, online lending platforms rarely ask for collateral. The loans are geared towards helping small businesses to grow. They are peer to peer platforms that involve few potent investors who lend to many startups.

8. Small Business Administration

Despite the emergence of smart lending platforms, traditional business funding is still existing. Small business administration has played a crucial role in stimulating the economy through nurturing startups. They have honed skills in offering loans and grants to upcoming entrepreneurs. They have fair terms and rarely interfere with the operations of your business.

9. Incubators and Accelerators

Your start up business should be handled like a small baby. Just the way you want the best for your baby, you must give the best to your business at this stage. For the business to flourish, you must pamper it with adequate financing, strategic management, and risk analysis. Incubators and accelerators are not just interested in financing your business but also in offering a helping hand.

They are more inclined to turning your dreams into reality. They will guide you through offering business models that are likely to provide tremendous growth. Generally, their financing comes with an extra package, such as providing a physical space where you can set up your office. In most cases, they will give you a space in a building where other startups are based. This will open an avenue where you can share experiences and exchange ideas with fellow startups. Accelerators will ask for a portion of your business. Therefore, you must decide the share of your business you are willing to give.

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