Entrepreneurs often need to find private investors to fund their business ideas. Since many small businesses don’t meet revenue requirements for traditional bank or peer lending, private lenders provide an alternative. However, many private investors are in high demand, so finding the right one may prove challenging. As an entrepreneur, private investors help your business by providing funding and industry specific expertise. Read on to discover the best ways to find private investors for your business.
Venture capitalists are a private investor type that should be sought out as your business grows and expands. They typically come into the picture when a business has an adequate management team and has established itself as successful. Usually, venture capitalists help businesses when they have new plans or make significant changes. The introduction of new products or services represents a great example of when a venture capitalist would step in. In addition, the investments required of venture capitalists are often much greater than other types of investors. These amounts can easily be millions of dollars. Surely, seeking out venture capitalists ensures funding as your business grows.
Incubators & Accelerators
Incubators and accelerators are private investors that provide a host of resources that help your business expand. Investors of this type typically want a large role in creating your business model, and will provide funding that builds an enduring business. Many incubators and accelerators offer physical spaces for your business, as well. This way, they can work with you more easily. In addition, much of the space around you will be occupied by other startups. This enables quick and easy collaboration with other like-minded entrepreneurs. However, incubators and accelerators often want a significant piece of your business in exchange for their services. Definitely, provide funding and a collaborative space for your business by looking for business incubators and accelerators.
Internet Networking Services
Additionally, there are many internet-based services that connect entrepreneurs with private investors. These services vary in price and capabilities. For instance, the world’s largest startup network allows you to fill out one application for hundreds of angel investing groups around the world. A separate database network lets you search for potential angels, while adding your own business projects for free. Moreover, another service allows you to post an anonymous proposal for free and charges a first-contact fee only if it matches with an angel investor. These services do not provide direct funding, however. They provide the opportunity to connect with angel investors. Certainly, employing these networks to connect with angel investors enables access to a wide range of investing individuals.
Equity crowdfunding enables private investors to buy into co-ownership of your business. Crowdfunding companies in the U.S.A. present an alternative to the traditional venture capital paths. Your investors receive equity in your company for their donations and investments. Therefore, you need a great marketing plan and assets to convince potential investors. Additionally, you’ll be giving up parts of your business due to rewarding investors with equity. Determining the amount of equity you’re willing to part with in advance ensures you retain control over your business. Of course, you’ll be receiving much needed funding with equity crowdfunding, but at the cost of parts of your business.
Hone Presentation Skills
The traditional route of verbally pitching your business plans to private investors is a proven method of connecting with them. Private investors are typically more interested in personal elements such as your vision than sales figures and other numbers. Additionally, they are often considering reasons why your specific products or services fit their personal portfolios. Often, these personal elements are best portrayed in a traditional pitch presentation. Therefore, tailoring your pitch to individual investors enables personal connections to be made. Indubitably, building your public speaking and presentation skills ensures more personal connections with your investors.
Entrepreneurs such as yourself can find private investors in a myriad of ways. One such way is to seek out venture capitalists at the proper time in the growth of your business. Alternatively, you can find a business incubator or accelerator, who provides a collaborative space in exchange for part of your business. The internet can be used for various networks and databases that may connect you to an angel investor. Additionally, equity crowdfunding surely helps get your business going, but also requires you to part with shares of your business. Finally, sticking with the traditional pitch route enables a more personal connection with individual investors. When considering ways to find private investors for your business, consider the points above.