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How to Find the Right Investor for Your Business

12/31/2018

1 Comment

 
by Samuel Gitukui

We are approaching the new year and many people have already set their new year resolutions. Is yours to grow your business? Let's find out how you can get funding to move your enterprise to the next stage.

As an entrepreneur, at some point, you were faced with the task of funding your business. And if you considered the option of investors, then you know that getting someone else to commit funds to your business is not easy.

It is not surprising to secure a meeting with a potential investor, thinking that the fact that you’ve managed to get them to sit down with you means that getting them to fund your business is a sure thing, only to come out of that meeting disappointed.

The main objective with investors is to make money. This means that they have their own methods of judging and avoiding risky ventures. If you want to be successful at getting investors to provide you with the cash you need, you need to be proactive and know how they think.

1.    Know their background

Most investors will not get into a business that they don’t know. This is why it’s important to contact only those that are aware of your type of business and how it functions.

If your business is centered around transport, then find an investor who has experience with the transport industry. They will be more willing to work with you and will also advise you on how to avoid certain pitfalls.

2.    Learn about their previous investments

You could say this point complements the first. Someone who has never invested in chemical supplies before will not be aware of the nature of the business and the industry in which you work.

Even with the best pitch, the investor is still not going to be willing to take the risk. However, if they have previously invested in your type of business, then you can catch their attention with a convincing pitch.

3.    Stage of growth

Note that investors will have their own preferences before they can fund your business. The stage of your business growth is just one of them. Is it a startup or has your business been running for quite some time now? Does the investor have a minimum revenue requirement? Such questions should be running through the mind of the entrepreneur before making that pitch.

This means doing the right research about your investor before sitting down for a meeting.

4.    Investment amount

How much do you want for your business? Is it $1,000 or $10,000?  Find out how much money investors are willing to put into any investment and work from there.

You can’t ask for a million dollars from an investor that is only willing to put in $10,000 into a business.
5.    Returns
Before an investor can put in money into your business they will have their rates of return. Is it double or 5 times the amount they gave you? Learn this and decide whether the investor is the right fit for your business.

Make sure that you are willing to work within their terms.

6.    Investor time frame

Investors have a time frame on when they should expect a ROI or return on investment. Again, make sure that you are willing to work with the terms of the investor.

But how can you learn all this?

Doing proper research is paramount. Also, during your meeting, you can ask these questions. This will help you figure out whether the investor is a good match for your business.
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1 Comment
buy coursework online link
9/22/2019 09:58:03 pm

I didn't expect that I am going to start a small business. I thought I was only here because I want to exercise what I like doing and what I am actually good at. I can't believe I just picked my nose in public while I am saying this. Anyway, it's a reason to be thankful and since someone has been repeatedly reminding me to just focus on this. That's what I should do, I think. Maybe I should start moving now. Maybe I should stop saying maybe and start actually moving. There is nothing to lose if I do.

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