You’ve got a great business idea or are already established, but need investment to grow. There are a number of different types of investor, but how do you go about choosing the right one for your business?
Not just financial support
Decide what you want from an investor, other than financial support. Do you also want someone with experience of your business sector or a passion for it, or someone who may also become a trusted friend? It’s best to meet with several potential investors, so they can ask you questions too, to try and work out if it could be a mutually beneficial partnership.
Where to look
Talk to other business owners so you can understand what worked or didn’t work for them. It doesn’t have to be in the same area as your company, as just hearing their experience of investment could be valuable. It’s best to talk to as many people as you can, including financial firms and accountants. If you are in Cheltenham accountants such as randall-payne.co.uk/services/accountancy/cheltenham-accountants are worth getting in touch with.
Attracting the best investors
Investors look for businesses with strong growth potential, a competitive edge and a clear route to profitability. So, to make your business attractive, have a detailed business plan and perfect your pitch.
It’s also important to network and attend any events which are related to your industry. Making contacts and expanding your choice is key to meeting the right people and having conversations. Once you’ve found an investor, be upfront and honest to build a strong relationship.
Preparing a pitch that wins investor confidence
Finding the right investor is only half the job. Once you have their attention, the pitch itself needs to show that you understand your business. Know your numbers and trends thoroughly, because investors are used to reading spreadsheets and will expect figures to back up every claim. Keep the presentation to no more than 30 minutes, leaving a few minutes at the end for questions.
Practise beforehand in front of people from a range of backgrounds, especially those who know nothing about your company, and ask for honest feedback. Speak clearly and use your slides to support the points you are making.
Be precise about how much money you are asking for and why you need it. Leave contact details and, if you have one, a detailed handout of your business model so investors can see exactly how they could get involved. Finally, explain your exit strategy, since anyone putting money in will want to know how and when they might see a return.