Steps to take for finding investors for your business

In today's economy a new reality has hit many startups and small businesses.This reality includes the fact that many banks simply are not lending to these smaller businesses.Coupled with the fact that non-bank lenders are hard find and many traditional lenders have raised their lending criteria to the point the even the best qualified are being turned down and you have many startups and smaller businesses wondering where they could turn for money. This situation has lead to many business owners wondering where they can turn for financing.

The good news is that there are places where businesses or budding entrepreneurs can find the capital they need.They can then use this working capital, for inventory purchases or any other kind opportunity financing.This money is coming from private investors. It is important to keep in mind that while many of these investors are not activity seeking new investment opportunities, some still have capital to invest if the right deal presents itself. If you are looking for capital for your business here are some steps to take for finding investors for your business-

• Size does matter-It is important to remember that when it comes to your product or service it is really not the actual product that really matters.What matters is the size of the potential market. You want to make sure that you can show your potential investor that you have access to a huge market.Investors are looking to invest in the largest market possible. Keep in mind that if they invest in your small business they are giving up other opportunities so they will be looking to make money.In addition if they have to take additional risks with your startup they will expect very high returns.


• Up with people-Most investors are not swayed by the idea you have but with you.Keep in mind that even if you have the best and greatest idea in the world if you cannot execute that idea-it is just an idea. Bringing investors onboard is a lot easier if have your management team in place or as much of it as you can. In addition your team must have the skills and experience to execute your idea. This can come from education or experience in running a successful business in your industry.


• Be able to show a track record-Investors are result oriented people.They want to see that you have taken your idea or small business as far as you can without their help. This track record can be in many forms.It can show current revenue, customer data or contracts that you have in hand. You must be able to demonstrate that your business is viable and that businesses/consumers want and need your products.


• Find the gatekeepers-Small business owners who successfully find investors understand the gatekeeper principle.It is not as successful to approach an investor directly as it is to go to the gatekeeper. Keep in mind that most investors trust and respect the people they work with and know. You should seek out CPAs, attorneys, successful business owners, etc who would have access to the type of investor you want. The first step is to have a conversation with these people about your company or your deal. Then you can let them approach the subject of investment and let them tell you they know of someone who may be willing to invest. Then you get an introduction to the investor from someone they respect.


• Have a great pitch-You want to have a well thought out and practiced pitch. It is important to keep in mind that these investors are busy and as such have short attention spans. In addition with few debt (loan) options, more businesses are pursuing these investors. The bottom line is that with increased competition, your business must stand out and you must be able to covey your investment potential in a very short and concise manner that grabs attention and compels additional consideration.