Starting a business is an intimidating prospect. One thing that makes the idea sound more feasible is the use of investors. Investors provide the capital a business needs to get off the ground.
However, it isn’t like investors are going to approach businesses to fund them. Entrepreneurs and business owners must find and approach these potential investors and find a way to entice them into supporting the endeavor.
Look to Family and Friends
Asking family and friends for financial support is a risk versus reward scenario. Many people prefer not to mix business and personal matters. While others are aware that friends and family are more likely to support any potential business venture.
When asking friends and family for money, it’s important to know up-front whether you are asking for a loan or investment funds. One has the implication of an eventual return in funds, while the other does not.
Don’t forget, by asking those close to you to invest in your business, they also invest in the risks alongside you. A business failure or loss may negatively impact the relationship.
Entrepreneurs (and thus most business owners) know well that their ventures live and die by the networks they’ve created. As such, there is nothing wrong with using their network to try and find the necessary funding.
When the time comes to further develop a network to find investors, don’t forget about local business owners. They made their start somehow and may be willing to pay that help forward. If nothing else, they can point new businesses in the right direction when finding investors.
Angel investors are more likely to support startups and small businesses than any other form of investors out there. They provide capital, frequently in exchange for ownership equity or convertible debt.
Naturally, it is tempting to try and seek out these angel investors. There are several ways to go about doing this, from looking within the community to taking the time to find one through an online platform. Sites such as AngelList, StartEngine, and CircleUp are specifically designed to help connect investors and businesses.