How to Look for a Business Investor
An investor is a person that commits capital in a business or a number of businesses generally with the objective of maximizing profits. There are various types of investors; the key investors being angel investors and venture investors. Angel investors are people who are close or known associates to the owner of the business such as family members or friends. Venture investors, on the other hand, are persons or entities that fund start-up businesses with the objective of maximizing returns that come with risky but highly profitable growth opportunities.
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Instructions
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Write an incisive business plan describing the type of your business as well as its growth prospects and performance targets. Use the business plan to concisely elaborate your mission statement, vision, values, market analysis and positioning, marketing objectives, selling goals, risks and contingency measures against risks.
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Define the operational and geographical scope of your business activities and specify the total amount of start-up or additional capital that you will require to finance the business. Begin communicating your business ideas by word of mouth to your friends and relatives if you are specifically targeting angel investors.
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3
Prepare an elevator pitch to reach out to a wider audience of both angel and venture investors. An elevator pitch is a clear description about a company or business which is well planned, concise and simple to understand. Send out the elevator pitch to your target and potential investors. You can also post the elevator pitch in online investor community web sites such as Go Big Network and online classifieds such as Craigslist.
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Shortlist the most viable investor responses from the elevator pitch. Contact the prospective investors and launch negotiations on the type of investor relationship that you want to establish. Present your business plan to the prospective investors and endeavor to woe them on the basis of the viability of your business ideas and processes.
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Sign contract agreements that will define the nature of relationship between your business and the investors that will accept your offer. The agreement should state rights and responsibilities of the investor and the mode of profit sharing and provisions for ending the investor relationship or winding up the business.
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Tips & Warnings
Profile your business in online communities and social network web sites such as face book to attract more investors.
Do not approach an investor without a viable business plan of your business.
Do not enter a verbal agreement with an investor as this might complicate legality of the business.
