How to Find Private Investors for Startup Small Business

private investors startup small business

Are you getting ready to start your own business and worried about how to find private investors for startup small business?

Worry no more. There are a lot of options available to find private investors for small startup businesses.

It can be an expensive proposition to start your own business if you want to do it right.

If you can find good investors to fund you then half your problem is solved. But in times of a recession it could be tough for you to find a private investor for a startup small business.

With the recession likely to last for awhile longer times will be challenging to find private investors for your new business.

The following are some options to find private investors for startup small businesses:

Difficulty:

Moderate

Instructions

1. Lending Clubs

   One of the best and easiest ways to get some quick financing is by using a lending club (see resources below for a link). Lending clubs are made up of a bunch of investors that loan out money to people and businesses with good credit. They are a great resource and should be the first place you look.

2. Commercial Banks

   If you are trying to finance your new startup business you should hit your local banks. I know this isn't a private investor but nonetheless you should try it any ways. In all likelihood it will be tough to get a private loan or an SBA loan (small business administration) but you should still try. Before doing so you will need to have put together a solid business plan before you ever hope to get financing.

   While you are there make sure to talk to the brokers about private investors. Many times brokers will know private investors or know of a network of private investors that they can put you in contact with.

3. Partnership

   If you are having a tough time finding private investors for your startup small business then think about finding a partner who can finance you. The partner can be either a silent partner or actively involved in the business. Just be sure to have an attorney put together a partnership agreement with a buyout option. The best way to go about finding a partner is to join business groups like the chamber of commerce. Another option is to look into joining groups on meetup.com to meet like minded individuals, hopefully with cash.

4. Venture Capital

   Typically venture capitalists are looking for established businesses to invest in but if you have the next greatest thing you may be able to persuade them to take a risk on you. The worst case scenario is they will tell you no. Here's the upside, even if they aren't interested chances are these guys will know of many private investors looking to invest in small startup businesses.

5. Angel Investors

   While you are looking for private investors for your startup small business you are bound to come across Angel investors. Angel investors are people who have a high net worth and willing to invest in the small startup business. Angel investors will provide you with funding but they will be in close contact with you to make sure that their investment is going in the right direction.

6. Finding private investors for a startup small business is a tough task. But if you have a solid business plan you shouldn't have any trouble finding investors.

   The key is, don't be timid or afraid to ask. People will help you if you just ask and if you ask enough people you won't have any problems finding a private investor for your startup small business.

   Don't forget to check the resources area below for a link to a legitimate and established lending club. Lending clubs are also a great way to invest money for a great return.

Resources

• Lending Club enables individual investors and well-qualified borrowers to get better rates than with banks or credit card companies. $50 bonus when you sign up to become an investor.