How to Find a Silent Partner

Taking on a silent partner is a good way for an emerging business to get financing without compromising control. A silent partner agrees invest in the company without assuming any voting rights or authority. To find a silent partner for your business or startup follow these steps.

Difficulty: Moderately Challenging

Instructions

1. Create a professional business plan that focuses on revenue projections. Many investors put money into a company because they are excited to get involved with a new business. Silent partners, on the other hand, focus on the return on their investment, since they have no hands-on interaction with the company. Create a business plan that shows how the company will create positive cash flow in a reasonable time.

2. Go to friends and family. They should have faith in your ability and trust you as an honest person. Do a friends-and-family financing round where you tap a few different people for various amounts. Make sure they understand that their investment doesn't buy any voting rights or authority over the company, even in an informal sense.

3. Tap angel investors. Wealthy individuals who fund projects during early development often are amenable to silent partner arrangements. There are many different angel investor networks that specialize in connecting business operators with angels. Use a directory, such as the "Angel Investor Directory" to contact a potential silent partner.

4. Make your business desirable. Investors are more willing to become silent partners if you can make your business seem hot or desirable. Securing major investment, developing a revenue stream and hyping the company in the media can create a favorable dynamic for your business that will help you find silent partners.

Resources

• Find potential silent partners online.

[Eston]

on 7/22/2009 Nice article