Foreign investment can provide a much-needed growth spurt to a new business. There are many investors in the foreign market looking to exploit different market conditions in other countries to make more money. As the owner of a new business, you may that attracting such investment would be too difficult. In fact, attracting investors can be straight forward if you go about it the right way. You don’t have to be an established company to get foreign investment. You only have to use your resources in the right way. Below are tips how to attract foreign investors to your business.
Work Out A Clear Business Model
Before you start chasing foreign money for lawsuit loans or otherwise, have a clear idea what your business is. Build a strong business model, with fully worked out unit economics. You need to be able to prove that your business will be profitable in the international market. To do this you will need to provide investors with data about how you have done in the domestic market. The international market contains a lot more uncertainty because of the numerous changing markets and government’s involved. As such, foreign investors can’t afford to take long chances on your company. To attract them you’ll have to have all the proof to convince them they’ll profit.
Consider Horizontal Or Vertical Investment
You should determine the which of the tow sorts of foreign investment you want. Most investors are looking for either a horizontal or vertical investment strategy. In a horizontal strategy, the investor and the investee do the same sort of business in their respective countries. In a vertical strategy, the investor is looking for a company to compliment their own business. They might pick your firm because it can distribute their products. Your company might also produce some component or resource the investor needs. Figuring out which of these strategies will best suit you early will let you target the right investors.
To attract foreign investors, you should network for them the way you would for domestic investors. There are plenty of groups both on the internet and in the physical space that network companies and investors internationally. These events will let you cultivate investors and win their trust. Networking like this will also signal to investors who might be interested that you are actively looking for investment. Like in domestic investing, attracting an international investor is all about trust and networking.
Know How The Investment Works
When you locate an investor, make sure you have all the answers to their questions. Have detailed information about how investing in your country is beneficial to them. As well, know all to potential pitfalls you and the investors are likely to run across. If government approval is needed, make sure you have all the forms ahead of time and can provide an accurate timeline for getting it. It’s important to show the investor that you know everything there is to know on this subject. It is one of many startup requirements. If you run into an unforeseen issue later in the process it may give the investor a second thought. When the deal comes, be prepared with all the information to make it.
Use Government Resources
You can turn to organizations interested in pushing these kinds of investments. In the US, the main group is called SelectUSA, and it’s run by the Commerce Department. These groups can put you in touch with investors interested in your market. They can also help you collect needed information. Many of these groups also run conferences where you can further network. Making your intentions clear to these groups will help attract attention. They may even give your company the ability to stand out in the space.
Attracting foreign investment can be simple, if your company does it the right way. Have a clear business plan that assures success. Consider what sort of strategy your investment should be. Use international networking events to build interest. Make sure your ready with all needed information when you do find an investor. Use government groups to build more resources. With these tips your company can find an effective foreign investor to help your company grow, so thta you never have to worry about business bankruptcy in the future.