An entrepreneur must pitch a potential investor for what the company is worth as well as sell the dream on how much of a profit can be made.
~Daymond John

You have a brilliant idea for starting a business, or expanding an existing one. Trouble is you’re low on cash. You need investors. Where do you find investors for your business? How will you capture the investor in his natural habitat? Here’s how.

1. First, You Need Bait

What this means is simply that you have to bring your own money in order to draw in potential investors. If you’re confident that your venture is going to succeed, cash in your savings. Get a line of credit using your home as equity. Max out your credit cards if you have to. If you can get a start-up loan, go for it. Banks and other lenders are becoming increasingly committed to small business. Depending on your projected income statements and cash flow, you might be able to borrow a tidy sum of seed money. This shows investors that you’re willing to put your own money where your mouth is.

2. Choose Your Quarry

For now, don’t go deer stalking if rabbiting will do. In other words, don’t expend time and effort finding big investors if you can get what you need in your own back yard. It can be a bit daunting asking Gran or Uncle Niles for money, but if you can present them with a solid business plan, they might be willing to hop on board. Make sure to explain exactly what it is you want, and what the terms will be. Of course a gift would be lovely, but if you want an interest-free loan, make sure you say so. Let them know when they can expect to be repaid. You might even want to make it a true family affair, offering them shares in your enterprise in exchange for start-up capital.

3. Watch for Open Season on Angels

If you need more money than you can reasonably scrape up using the strategies previously mentioned, you might want to seek out an angel. Angels are established persons or business who typically have a significant net worth and are willing to invest in companies that look promising. If you need to rent office space or hire staff, or do anything else that requires a fair amount of funding, you can find angels in their natural habitat. This would include, of course, their place of business as well as conventions and trade fairs. Sometimes angels even conduct competitions or events that can provide you with networking opportunities.

4. Prepare for a Successful Hunt

Preparation is everything. You need to do the following:

• Know your quarry. That is to say, identify your investors. Research them thoroughly. Know yourself as well – be prepared to answer hard questions regarding your product or service, its sustainability, and your plans for long-term growth.
• Understand the habits of your quarry. What motivates them? Why should they want to invest in your business? What makes them tick?
• Use good-quality bait. Your business plan should include market research and realistic financials. Be able to explain how you plan on creating profit, and how investors will benefit.

We can’t say it often enough – be prepared.

5. Once It’s in the Bag, Don’t Give up the Chase

If you’ve found investors for your start-up or expansion, don’t rest on your laurels. Keep on networking. You already know that finding investors for your business isn’t easy. The skills you’ve learned may stand you in good stead at some point down the road. Who knows? Maybe your business will be so successful, next time you’ll be going after big game!

Happy Hunting

Now you know what you need to do to capture the wily investor, so get out there and go for it. There is funding available to help you set up your new business or help your existing one reach its full potential. Happy hunting, and good luck!

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