Finding investors

Every business large or small finds themselves at a time where the need arises for more capital for development. While small businesses owners especially struggle with this dilemma every business owner at one time or another begins to consider their options. Many times the idea of finding an investor seems like a good idea but finding an investor is not like finding a clam on the beach; the search is more similar to finding the pearl. So if you are business owner considering looking for a way to raise some capital here are some tips for finding an investor-

• Know who you are looking for. You should keep in mind that your chances of connecting with the investor you need will be much better if you keep a profile of the "typical" investor in mind. According to studies that typical investor fits the following categories-
  1. Has an annual income that exceeds $100,000
  2. Is between 40 to 60 years old
  3. Will have a net worth in excess of $1,000,000
  4. Has had previous successful entrepreneurial experience
  5. Is someone who expects to hold on the investment for up to five to seven years (although some investors wish to "cash out" after only a few years)
  6. Is someone who enjoys advising the entrepreneur and likes to be part of the action
  7. Will invest up to $150,000 but may participate in a syndicate of other investors bringing the total investment to multiples of individual investments
  8. Will refer deals to other private investors even if he or she has chosen not to invest
  9. Is someone who likes to invest in an industry with which the investor is familiar
  10. Will source deals through referrals.

  You should understand that successful investors will look for companies with growth and export potential. They are people who understand that it may take several years before their investment will pay off - although they also expect to be well compensated for their risk.

• Look for investors close to home. Because so many investors like to play an active role in the business they invest in, they prefer to invest in businesses that are close to home. Most likely your biggest investor will want to be able to see your business up close and personal.


• Network, network, network. You should keep in mind that you may need to be referred to an investor. They are generally not hanging out on the street waiting to talk to whoever comes by. So to find an investor you need to get to know the right person (the one who can refer you to the investor you are looking for), which means immersing yourself in your local business and social community. It can also be helpful to focus on business owners - as these are the people who might be or become investors themselves or know a potential investor. Savvy business owners will join business and trade organizations and regularly attend the meetings. Also joining civic and community organizations can be great for networking, along with attending trade fairs and events. Whatever you do get your face and your name out there and meet as many people as possible.


• Remember that most investors do not fly solo. While there are some investors who invest entirely on their own, many will operate as part of an informal network or syndicate where they can pool their resources and share the risks. Consider checking with business alliances or economic development councils where you live since there may be an active group of potential investors in your community.

While finding an investor is not a particularly easy task, the effort can really pay off when you find the right investor who is willing to invest in your business. Besides providing the capital your business needs, the advice and know-how of an investor can be a vital key to shaping your company's success.