How to Find Investors for a Start-Up Company

Obtaining sufficient investments can be critical for a new business.

Proper funding is critical to a start-up company's success. Well-funded ventures have the capital needed to purchase equipment, hire key personnel and maintain business operations until obtaining a profit. Many investors look for opportunities to grow their money by placing it with new companies in the hopes of a significant return. The key to finding investors is to locate individuals or companies with sufficient funds and a willingness to wait patiently for a financial return.

Instructions

1. Create a specific, yet simple business plan that describes the products or services you plan to offer, the funding needed to establish the business, a financial outline including a cash-flow statement, a break-even analysis and a balance sheet, a marketing plan and implementation plans.

2. Present your financial requirements to several banks and assess the reception. Consider consulting with the Small Business Administration on loan-guarantee programs that may help lower the barriers for loan funding.

3. Seek out Angel Investors. Angels invest specifically in start-up businesses or recently founded companies in need of funding. Lists of known Angel investors are available on the Internet through business publications such as Inc. Also consider searching for Angel investor websites that discuss their review processes.

4. Advertise your business investment opportunity. Discuss your start-up business with friends, relatives and associates. For some opportunities, your close personal relations may want to invest, or they may know of individuals looking for investment opportunities. Consider networking with other entrepreneurs through local professional business organizations and trade associations to gain insight into additional funding sources.

5. Join a business incubator, which is an organization that offers guidance, support services, low-cost business space and help in obtaining funding. At a minimum, this type of organization will allow you to refine your business plan and marketing pitch.

Tips & Warnings

• Evaluate your investment options based on support, requirements and required return.

• Avoid funding methods that do not provide sufficient time before a significant return is achieved.

References

• Inc.: 20 Tips for Finding Money Now
• Paul Graham: How to Fund a Startup
• Small Business Notes: Business Incubation

Resources

• Entrepreneur:Elements of a Business Plan