Finding Investors for Start-Ups

Finding investors is not easy, especially if you are just beginning a business. Although, there are investors that focus on start-up business, there are some that are not that willing to risk their money on something that has very little security. Although, finding investors for start-ups can be daunting and difficult, it is not impossible. Here are some ways wherein you can find investors:

1. Personal Contacts
Do not discriminate. This can include asking your friends, colleagues and even your family. These could also be the most willing investors you’ll find in which you can have a good deal or agreement. However, just because you know them, do not be too lax. Be a professional or act professionally and always keep your word. Deal with them like how you would with a formal investor. Prepare the necessary paperwork and work on your business plan. You can also ask them to refer you to their own clout which would be willing to invest in a business such as yours.

2. Angel Investors and Venture Capitalists
You can also find various investment firms which can help you out. To give you an idea, investors that are most likely to be interested in a start-up company is an angel investor and a venture capitalist. Angel investors are individuals who have the finances to invest and are usually on the look-out for start-up businesses that have a great potential of growing. They would usually ask for high returns on their investment and an exit plan. Venture capitalists can also be interested in a start-up business although, these types of investors usually seek to buy a portion of your company. You can find some online through investment firms or also through word-of-mouth or referrals.

3. Loans or Debt Financing
This is mostly given out by banks. You can either opt for a secured loan which means you would need to give them a collateral or an unsecured loan which is just loaning money and paying it back. Both options come with interest rates which is dependent on the institution from where you acquired the loan. Secured loans allow you to borrow bigger amounts of money that an unsecured one.

Whenever you are finding investors, always prepare your business plan. This is the most essential thing that you would need. Investors would need to see this to gauge if it is worth investing in your business. Do your research as well so that you are aware of what deal it is that you are getting into.

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• What Startups Are Super-Angel Investors Looking to Fund Next? (forbes.com)
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