How to Locate Private Investors for Projects
If a business wants to expand, it needs capital. But banks are the last places to turn to because their lending policies are often very restrictive. In many cases, a business needs to find a private investor, but finding one can be difficult. Also called an "angel," a private investor takes risks that banks typically avoid. But after assuming a risk, a private investor wants to be well compensated for investing time and money. Here are several ways to find your angel.
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Instructions
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Prepare a solid business plan. That's the first thing potential private investors want to see. Private investors want to know your vision for your company as well as your plan for implementing it. They also want to know your proposed market, your marketing plans and your economic projections.
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Look nearby. Typically, private investors want to take an active role in an investment, so they look for opportunities near where they live. They reason that nothing is as effective as being able to meet often with those running the company and making whatever contribution they can to the company's growth effort.
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Know the profile of the typical private investor. He probably has a net worth of more than $1 million, is over 40 years old and more then likely has been a successful entrepreneur. He can fly solo or be part of a group of similar investors to attract larger opportunities. He knows other private investors and will recommend them to you even if he turns you down. Also, he feels more comfortable investing in businesses with which he is familiar. Finally, he will be more likely to provide capital if you have put a substantial amount of money into your business, because that shows you are willing to share the risk.
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Find an interested private investor by being active both socially and in business. Join a trade association and a service club where networking can pay substantial dividends. And don't overlook opportunities to network if you are a member of a luncheon or country club. While you may not run into a private investor doing this, you can count on referrals from members and guests.
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Go online to find a private investor. To get started, go to the websites of three of many organizations that connect private investors with business opportunities. (See Resources.)
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