How To Find The Right Investors For Your Business

Angel investors bring more to startups than just funding. Most of them have been successful entrepreneurs or financiers. Therefore if you’re lucky enough to be interested in an angel investor you will get help with the cash required to get your startup operational as well as extensive experience, knowledge, and contacts to lean on to boost sales and hire staff.

Plus angel investors want to provide advice and information on other ways to engage suppliers and partners so they too can make a healthy return on their investment in your business.

Entrepreneur states that you can partner with angel investors or venture capital firms. The former are willing to invest in firms that need less than $750,000. Some may set lower investment thresholds. Venture capital firms are for those who require more considerable funds at startup.

The following is some advice on how to look for investors.

Investor Profile

What is the Demographic of Your Ideal Angel Investor?

The Balance Small Business suggests that entrepreneurs look to millionaires who live locally that have an annual income of more than $100,000. These ideal investors will also have successfully started their own company in the past and want to hold their investment in your firm for the next several years.

Someone who likes to advise the firm’s owner and has industry experience is also highly desirable as your ideal investor.

Network Like Crazy

Since you are optimally looking for someone local, you will need to network in your area. The Balance suggests other business owners. Some of the places that they suggest for optimal networking include business organizations, industry groups, trade fairs, and civic groups. Of course, the local Small Business Administration office is another excellent resource.

The best business university program in your area will also be a source of local networking or leads.

Of course, your networking can be online as well. You can use LinkedIn’s search features to find suitable investors. Then, you can find their colleagues and reach out to them as a means of gaining a foot in the investor’s door.

Apply To Business Accelerators

If you are not having as much luck with your attempts to gain the trust of investors, you can get help to further develop your business plan from a startup accelerator program. Often, if you are serious and committed, you will receive some compensation as you develop your concept. These programs can last for several weeks or months to allow you to dig deeper into your research, begin to get some traction in your market and learn how to pitch your startup.

Accelerators also provide business advice and introduce you to investors.

Create A Great Pitch Deck

Your pitch deck is how you pitch your enterprise to investors. According to Forbes Magazine, you will need 15 to 20 pages of information that is not wordy and a lot of graphics and visual appeal.

In the Forbes article there is a list of everything that needs to be in your pitch deck presentation, but suffice it to say that you need to present a full description of the problem you are solving in the market, your solution, a picture of your customer base and competition, your marketing plan, financial information and information about your team.

The best pitch decks tell a story, and you will need to know and understand your metrics. Forbes states that you need to have a profound sense of the market beyond just the size and trends.

Pitch Investors Live App

Available for iOS now and Android soon, you can pitch your investor in real-time with the Pitch Investors Live app. Each pitch is transmitted on Facebook Live and it gets stored inside of your app as well as on a YouTube channel. This multiplies your exposure for each pitch.

Directories

Entrepreneur Magazine stated that one place to begin looking for investors is in directories of investors. They suggested that you only pursue investors interested in your industry and type of business plan.

Angel Capital Association

The ACA has their member directory broken down by region of the country. For California, New York, and Texas, there are separate listings.

Gust

This organization makes it a bit easier to find your ideal investor because you create a profile that will link you to groups of investors most suited to your industry and business plan. Gust helps entrepreneurs get all of the paperwork and business plans out of the way so that the company is ready for investment opportunities. Of course, these services are for a fee.

The National Venture Capital Association

Besides having a directory of venture capitalists throughout the nation, the NVCA also hosts symposiums of interest to startup firms; supports research on topics of interest to investors and entrepreneurs; and advocates for laws and regulations that support high-growth enterprises. Sadly, the directory is simply a list that will require that you visit each website of investment firm members.

Microventures

You can register your business plan and startup on MicroVentures to find a wider variety of investors who are willing to provide micro-lending and/or micro equity for your budding enterprise. This is an especially good source when you have something really new that will shake up an industry.

WeFunder

WeFunder is a crowdfunding program for micro equity. Like MicroVentures, those who are trying to create solutions and solve problems are more likely to receive funding. If you get funded, you will owe WeFunder 7 percent of the investment.

CrunchBase

Maybe the best way to tailor your efforts and not end up presenting to hundreds of potential investors is to research them on Crunchbase. You can use two filters if you are free, while registered Crunchbase users can opt for unlimited filters for your investor search if you pay for Crunchbase Pro.

For example, you can search by investor type, industry, and geographic area. You will end up with data profiles like this one on Fisher Investments. There is enough information in the data profile to help you decide if each is a good investment to pursue.

Bear in mind that not all firms will offer the same type of funding, such as the example of Fisher Investments who do not partake in venture capital. This type of information is crucial.

Summary

There are many ways to reach out to potential investors. You need to come to the table with a solid business plan, a deep understanding of your financial position, target market and a great pitch deck that tells a story.

Using in-person networking locally as well as online sources, you can maximize your time investment and multiply your efforts towards funding.