Attracting investors for your small business

JohnTaylor April 8, 2013 0

Many small business entrepreneurs need a little help in

getting their ventures off the ground. Investors can supply needed capital and,
in some cases, advice to new business owners as they start their business.
However, to get investors involved, you have to get them interested.

According to the Entrepreneurship in the United States
Assessment, angel investors typically roll about $23 billion per year into
businesses, and about 50,000 to 57,000 businesses receive funds from angel
investors each year. If a bank loan or other financing isn’t the route you want
to take in building your business, turning to investors is probably your best
option for raising money to start your business.

Here’s a few tips for making your proposed venture more
attractive to investors:

Present a solid business plan. Your business plan is perhaps
your most effective pitch to investors. Be sure that it’s concise and complete,
and shows that you’ve made a serious study of your proposed new business, the
money it will need to get started and the potential risks involved for yourself
and your investors.

Do your homework. Investors will be impressed by
entrepreneurs who know their market, product, financials and can explain
specifically how their products or services can take advantage of opportunities
in the market and differ from their competitors. Be ready to answer questions
about projected earnings and growth and how investors’ money will help your
business grow.

Get some skin in the game. Investors are more likely to be
impressed by entrepreneurs willing to put some of their own personal assets
into their business. It shows dedication and confidence.

Be willing to listen. Most angel investors are more willing
to contribute money to business owners who are willing to listen to their
advice. As angel investors are typically experienced entrepreneurs, this advice
is very likely to be well-thought out and sound. While you may not ultimately
decide to follow an investor’s advice to the letter, at least be willing to
hear them out and consider what they have to say.

Get a partner. If you have a reliable friend or associate
who has started businesses before or is skilled at securing meetings and
commitments from investors, consider bringing him or her in as a consultant or
partner. You’ll get the benefit of both his or her experience and contacts.
Just be sure to clearly outline the relationship in writing, to avoid conflict
over leadership and finances.

Once your business gets started, you’ll hopefully make many
sales, but to get there you must make this first, most important sale to
investors. By following these tips, you’re more likely to get meetings with
investors and impress them with the potential of your business.

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