The main reason why great business ideas remain unrealized is the lack of sufficient funds for beginning entrepreneurs. A serious problem… But not for those who know how to attract finance for the development of their business.
After all, many people are ready to invest in startups in order to later make a profit from them. Want to start a cool project but don’t have enough money? Then it’s time to learn how to find investors to promote the business.
How to prepare for attracting investments
First, let’s figure out who an investor is in business. After all, the strategy of building relations with the depositor directly depends on the understanding of this term.
Many aspiring entrepreneurs perceive people who are ready to pour money into young projects as altruists. In fact, no one will sponsor even the most promising startup “for thanks”.
The real goal of any investor is to make a long-term profit. A person who provides financial support wants to understand why they need it.
Therefore, before asking the question of where to get an investor for business, you need to take a number of preparatory steps:
Decide on the required amount and goals for which the money will be spent. This will bring specifics to the startup’s development plan.
Prepare an investment proposal. Try to fully reveal the potential of your project, show the current state of the business and its growth prospects.
Make a financial plan for the company’s development. And preferably 3 options: optimistic, realistic and pessimistic. So business investors will be able to immediately calculate possible risks.
Prepare the pitch deck. Mandatory slides: idea, market analysis, product advantages, main competitors, attracting capital and directions of its use.
After completing the training, having the necessary documents in hand, start looking for sources of capital.
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How and where to find an investor for a business
The main mistake of novice entrepreneurs is that they believe that there are very few investors and no one will give money anyway. But in practice, there are enough people who want to get involved in a profitable business. So, where to find investors for the project?
1. Friends and relatives
It would seem the most obvious point. Who but close people are familiar with your business ideas and believe in your success? Probably, they will agree to invest in the development of a promising business. You don’t even have to think about how to attract an investor to the project.
But with such a fat plus, this strategy has a number of disadvantages:
Cooperation with friends is suitable only if relatively small amounts are involved.
Relatives will want to constantly keep their “hand on the pulse”. Get ready to report on how things are progressing at any time of the day or night.
In case of failure, you risk spoiling relationships with loved ones.
Therefore, it is better to immediately weigh all the pros and cons. If friends and relatives are well-off people, and the possible loss of invested funds does not stress them, everything is fine. Otherwise, it is better to consider other options where you can find an investor. There are still many of them.
2. Business accelerators
If you do not know where to look for investors for a startup, we advise you to go through one of the business accelerators. These are support programs for young projects. Their main goal is to train budding businessmen and develop companies in the shortest possible time. As a rule, a new product is brought to the market within 3-5 months.
It is important to choose an accelerator that will provide real knowledge and provide the startup with a professional mentor. For example, the Timeweb Hub project has been helping businesses grow systematically for over 10 years.
What Timeweb Hub offers:
Investments up to $1 million.
Examination and improvement of the existing product.
Assistance in the development of a pilot project.
An experienced mentor.
Help in setting up the IT infrastructure.
Timeweb Hub is aimed at fruitful cooperation. The accelerator team devotes a lot of time to the startup. He invests literally all his resources, including financial ones, in interesting business ideas.
Examples of projects that the accelerator has already helped to get on their feet: Hostman.com, Craftum, MyReviews.dev, Lovi.Link.
3. State support
If your goal is to find an investor for agriculture, the development of urban infrastructure or the scientific and technical sphere, consider the option of receiving support from the state. It is these directions that are considered a priority when providing benefits and subsidies at the expense of the budget.
Note that there are certain nuances here. So every state penny is under control. And expenses related to business development will have to be documented. And on a regular basis. It’s scary to imagine what will happen if you allow a delay in the report or the spending of budget funds is recognized as inappropriate.
4. Investment brokers
Simply put, intermediaries. For a certain percentage of the deal, they will find you a suitable sponsor. Brokers work in business circles, so they know how to quickly find an investor for any project.
Please note that there are often dishonest people among intermediaries. At first, they ask for an advance, then they specifically take the time to get as much money as possible from the young entrepreneur.
Here is what Maksym Seryakov, the founder of the Narodne IPO accelerator, tells about his unsuccessful experience with business brokers:
If you still decide to entrust the question of where to find investors for a startup to a broker, do not make a deal with the first person you meet. First, provide references and make sure of the intermediary’s professionalism.
5. Crowdfunding platforms
Crowdfunding platforms can be compared to volunteer projects. Here, startups collect donations for the development of their business from ordinary people who are ready to support interesting ideas.
You don’t know how to find investment for your business – try registering on one of the crowdfunding platforms.
To receive financial assistance, you will need to post a presentation of your project on the platform. Users who like it will be able to transfer money for promotion.
6. Online investment services
Today, many online platforms are successfully functioning where potential sponsors and budding entrepreneurs meet. You can advertise your project there and wait for it to be pecked at by a private investor for business or a specialized fund.
Keep in mind, you will have to pay for the accommodation. Not a lot of money, but still.
The price of one of the most popular business portals:
Examples of several specialized resources where to look for investors to promote a business:
It is worth noting that it is unlikely that you will receive an offer for cooperation immediately after the publication of the project. As a rule, on such online sites, it takes from 3 to 6 months to find a person who wants to invest in a fresh business idea.
7. Economic and investment forums
If your plans do not include additional costs, then we suggest you find out how to find an investor for free directly. One of the sure ways to promote your own business without investments is to attend business events, such as economic and investment forums. There you will be able to meet many interesting people, including those who are ready to finance your project.
Even if you do not meet a direct sponsor, representatives of business circles will tell you where to find investments. Only you should not go to such events empty-handed. To successfully promote your idea, you should always have a detailed business plan ready.
8. Venture funds
Their assets are formed at the expense of finances received from many investors. Venture capital funds invest in startups in exchange for a stake in the company. When the product breaks even, they usually sell their stake.
Simplified venture fund scheme:
Applying to a venture capital fund is one of the fastest and most effective ways to get financial support. Therefore, those who are interested in where to find an investor for a small business, it makes sense to contact one of these organizations.
Large venture funds of Russia:
It is worth noting that not all willing people receive support from venture capital funds. To pass the stage of initial selection, you will need to make a competent application and a reasonable business plan, as well as collect the necessary package of documents.
9. Business angels
These are private investors who help promote interesting projects with their own funds. As a rule, business angels provide support only at the initial stages of a startup’s development. Their main advantage is their willingness to provide not only financial, but also consulting support to budding entrepreneurs.
Are you thinking how to find an investor to implement an idea? Here are some resources where you can leave an application for cooperation with Russian business angels:
You can also just google it. Enter the query “how to find investors for a business angel project” and monitor the information received. Many catalogs of authoritative Russian and international private sponsors are published on the network.
10. Advertising campaign on own website
Now let’s figure out how to look for investors using your website. This is a great way, because most of the time people spend online. Therefore, you need to make sure that your project catches the eye of potential sponsors.
How to find an investor for a startup using your own resource:
Create a site for your own project. Both single-sided and multi-sided are suitable.
Create a bright and visual presentation of the product. It is better to entrust the design to a professional web designer.
Set up contextual advertising. In the absence of experience and the necessary skills in running advertising, we advise you to hire a specialist.
Carry out SEO promotion of the site. This method is more suitable for multi-page sites, but it will also be useful for the landing page.
When the first steps are taken, connect additional tools to the promotion of the resource. For example, create a social media page for your project and promote it with targeted advertising. Or involve guest posting. Sooner or later, potential sponsors will be interested in your project.
Useful tips for finding investments
Now you know where to look for an investor. And so that the search does not drag on for many months, use the following recommendations:
Make sure you have all the key documents on hand: business plan, financial analysis, project presentation, investment proposal, calculation of the required amount.
Treat the search for investment as a full-fledged business task. Don’t let the process go by itself and don’t hope for anything. Make a clear scheme of actions for attracting funds.
Take small amounts from the bank. If you need 1-2 million rubles, it is easier to take a loan than to spend time and effort looking for investors.
Don’t give up. Prepare to be rejected. This is normal practice. No matter what, try new strategies, keep looking.
Remember, investors only invest in strong projects and people who are confident in their own abilities. So work on your positioning. You must think and look like a successful person who is ready to share a golden vein with the sponsor. And not like a beggar standing with an outstretched hand.
So, today we figured out how and where to find an investor for a business. However, knowledge alone is not enough. To get money for the development of your business, you need to act. One strategy did not work – don’t wait, switch to another. And it is better to use several considered methods at once. And success will surely smile at you. After all, someone who seeks will always find.