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How Do I Find an Investor for my Business?

One of the challenging parts of starting a business is the money that it takes to get up and running. Often, just the equipment that you need can be quite expensive. If you have a retail store, you not only have to buy or rent a store, there are shelves to be bought as well as products to fill them. It all adds up quickly.

For this reason, many people look for investors to help them get started. However, most people don’t know where to start. So, how do I find an investor for my small business? The answer actually depends on your business and finance needs, and also whether you’re prepared to offer equity in your business for that initial funding.

There are many accelerator or incubator programs. These are organisations that provide advice, guidance, work spaces, access to further funding and a range of other support services for businesses in the startup phase. As the name implies, Accelerators operate as a kind of ‘boot camp’, and aim to speed up the timeframe from business idea to operating and help you to hit the ground running. Incubators are a little different in that they usually allow the business to develop at its own pace, while providing things like shared facilities, office space, and mentoring in areas like marketing and accounting. It depends on the individual program as to the costs or equity involved in accessing them.

Angel Investors or Venture Capitalists can be either individuals or a group of people who are willing to invest money into start-up companies. Again, there are significant differences between the two, and usually venture capitalists can provide significantly larger sums than angel investors. Angel investors are typically well-connected and wealthy individuals, who are looking for unsophisticated arrangements to help entrepreneurs get an idea off the ground. Venture Capitalists usually have more structured terms and will want a due diligence process, significant equity, and board positions etc.

No matter who you choose to invest in your business, they are going to want to know that your business is going to make a profit. For this reason, it is important to do your research and then come up with a good business plan before you even start putting any of your time and money into a business. Once you are confident in your business, then you can start looking for others to invest in you too!

Check out the Nationwide Super blog for more advice on your small business.