You have decided that you will develop your own business. Alone or in a team of like-minded people, you continuously improve your business idea, study the market, and look at possible competitors. And the moment inevitably comes when you understand what initial investment your project requires. Investments at the start may differ significantly, but in ninety-five percent of cases, a beginning businessman does not have the required amount of available funds. The way out of this situation is to find an investor for the business.

In this article we will talk about:

• what preparation needs to be done before launching your project on the investment market;
• where to find an investor;
• how to interest an investor in your project;

• consider forms of investment cooperation;
• Let's talk about the mandatory clauses of the investment agreement;
• let's be inspired by the experience of successful startups and look at their working ideas

So let's get started.

First, you must clearly understand your business idea and its accompanying business mission. If you yourself cannot formulate how exactly your future product or service differs from those existing on the market, do not expect that an investor will be interested in your idea.

Example of a bad business idea presentation: opening of a private kindergarten in one of the cities of the Moscow region.

An example of a good business idea presentation: opening a private kindergarten for 100 places in the village of Nakhabino, Moscow region, in order to satisfy the increased demand for kindergartens in the absence of supply.

Answer your questions honestly, preferably in writing.:

1. Why do I think that my future product/service is better than what is already on the market?
2. What target audience might it be of interest to?
3. How popular will my product/service be?
4. How do I plan to organize the production of goods/services? Here it would be appropriate to briefly describe the technological process.

At the meeting with you, the investor will ask these questions, so you must be 100% sure of the answers. Also, detailed answers to the questions described above will contain a business plan, with which you will go to the investor for a presentation of the project.

Second, you need a well-written, workable business plan. There is a lot of information on writing business plans both on the Internet and in specialized literature. You just need to study this issue and follow the recommended sections when writing. If you do not have the time or skills to write such documents, you can always turn to professionals for help. There is a huge selection of business plan writing services on the Internet. But!

A good business plan is not a beautifully written document or professionally presented information about the market and product. This is, first of all, a detailed description of your idea and evidence that the idea will be profitable. By the way, we talked about how to write a business plan in one of them.

Whether you write it yourself or delegate the writing of a business plan, you must know by heart and be confident in every proposal, and especially in the technological and financial part. Be prepared for the fact that every statement you make will be questioned by the investor.

Investors are primarily interested in:

1. The amount of investment you are applying for, as well as what share the investment will occupy in the total amount of capital investment in the project.
2. Profitable interest rate on investments. The rate on risk-free and low-risk investments (deposits, bonds, reliable shares) tends to 14-15% per annum, so you should offer a higher rate.
3. Payback period is the period in months during which the profits from the business will cover the initially incurred costs.
4. Project risks. The startup is a leader among risky capital investments. Write honestly about all the risks; experienced investors know about them anyway.

Indicators that must be present on the title page of the business plan:

1. Amount of investment.
2. Profitable interest rate.
3. Payback period.

If the investor is not satisfied with the above indicators, he will not look at the rest of the information. Put yourself in his shoes. He gives his money, earned with blood and sweat. What is he waiting for? Innovation? Social significance? ARRIVED. Everything else interests him insofar as. So give him a profit.

The third point in preparing for a meeting with an investor will be creating a presentation of your business project. Whether it will be a full-fledged presentation in Power Point, a printed album, or a set of sheets with key figures, tables, images is up to you. It all depends on the scale of the spartap and the requirements of the investor you contact. The main thing is your ability to convincingly present the project using prepared materials. Remember, the main thing is your prepared speech and charisma, and then a beautifully designed presentation. Get the investor interested, give him something to think about, and “infect” him with your idea.

When the preparation is completed, you can begin the search.

Where to find an investor?

Credit organizations

The most obvious solution for a novice businessman is to contact a bank. Many, many aspiring entrepreneurs took out so-called business development loans or even consumer loans and successfully developed their business. But banks want to invest money only in reliable projects and receive a good interest income.

If you choose this path of searching for investments, we recommend contacting a bank where you have an account and/or have a positive credit history. If there are none, contact large banks with a well-known name, avoid microfinance organizations.

A list of the most interesting business loan offers to date is given in the table.

Table 1. Business loans in Russian banks

A list of interesting consumer loans is given in Table 2.

Table 2. Consumer loans that can be used as business investments.

Pros: high probability of receiving funds if all documents and security are provided, transparent and verified scheme for raising funds.

Minuses: high interest rate, security and confirmation of income, guarantees of third parties or organizations are almost always required.

Private investors, business angels, crowdinvesting

If the option of going to the bank seems too “expensive” to you (and it is), or you do not want to provide the bank with your apartment as collateral, you should take a closer look at private investors and the so-called “business angels”. Private investors are most often people who have already earned enough money from their business. And now they invest it in other businesses and receive passive income. In addition to investments, business angels provide expert support to young businesses, can introduce you to certain business circles, advise working business models, and suggest ways to optimize your business.

Type the words “private investor” and “business angel” into a search engine and you will find more than a million offers from potential investors. Among the proposals there will be investment exchanges, the most famous of which are:

• start2up
• EASTWESTGROUP
• investorov.net
• business-platform
• SBAR (Russian business angel community)

However, do not create vain illusions that by placing an ad describing your project, you will receive hundreds of offers from potential investors. You will have to write letters and call yourself, and more than once. After sending a hundred applications, you may receive only three to five responses. .

Beware of scammers, of which there are a sufficient number on the Internet. Never deposit money for anything, under any pretext. And read the contract carefully.

Register on forums for professional communication of TOP managers, such as E-xecutive and Up-pro. Reputable employees of large companies communicate on them. They have free financial resources, but no time to develop their own business. A good opportunity for you to express yourself.

Another interesting subtype of private investment is crowdfunding and crowdinvesting projects.

The term " crowdfunding" comes from the English words "crowd" - crowd and "funding" - financing, provision. It is clear that we are talking about collective fundraising for a project. This can be either a commercial endeavor or a charity event. Crowdinvesting- This is also a collective fundraiser, but Spartapas and commercial ventures are already becoming the object of investment. Investors expect profit from such investments.

Crowdfunding is an interesting option for an interesting idea

Both types are relatively new in the world of investing and dynamically developing. True, to successfully search for a group of unrelated investors on the Internet, your project must be either very bright or very modern and trendy. The proposal should “catch” the eye. High technology, IT, projects with a social impact, with a creative component, etc. are suitable. And you are unlikely to receive large investments (more than 1 million rubles), since mainly young beginning investors with a share of adventurism, but without large funds, register on such sites.

Take a look at Russian crowdfunding sites:

• Planeta.ru;
• BoomStarter;
• Simex;
• Crowdsourcing.ru.

It is worth noting that your relatives and friends may also turn out to be investors for your project. But you shouldn’t take such investments carelessly. Make preliminary preparations for a meeting with a loved one in the same way as if you were presenting a project to an unfamiliar investor.

Pros: private investors require fewer documents and often provide money without collateral; they can help a business with experience and connections; for small, ambitious projects, investments are found quickly.

Minuses: the target income interest rate is often higher than in banks, the risk of falling for scammers is high.

Video - Attracting investments

In this video, Oleg Karnaukh, founder of the Smart Business project, says:

• at what stage does a small business need investment,
• what arguments to get for a conversation with an investor
• how to remain the owner of your business
• how to scale a business.

Investment venture funds

Let's move on to the most difficult, but also the most interesting ways to attract investment.

First, let’s define what a “venture fund” is.

Venture fund comes from the English word “venture” - an adventure, a bold undertaking, a risky undertaking. Such funds invest money with a high degree of risk, but also with great profit. 80% of venture capital investments depreciate in value, but 20% bring such a profit that it is several times higher than the costs.

If your future business does not relate to:

• high-tech sector,
• IT and telecommunications,
• healthcare,
• Internet and e-commerce,

You can safely skip this paragraph of the article and move on to the next one.

For the remaining ones, we reveal the work scheme of venture funds. The fund's team consists of experienced financiers who deal primarily with high-risk investments. All applications go through several stages of consideration.

Stage 1. Review of submitted applications. The business plan and other documents are checked for correctness of writing, compliance with the fund’s policies, and profitability. 90% of applications do not pass this stage.

Stage 2. Conducting research in the field of competitiveness of a new product, financial efficiency of a future business, and management competence. 9% of applications do not pass this stage.

Stage 3. Negotiating and concluding a contract. 1% of those who apply become the owners of the required amount for business development.

We recommend applying to venture funds and taking an active interest in new venture projects. Even if your application is rejected at the first stage, this is not a reason to stop, but an opportunity to analyze your mistakes and submit the documents again. In fact, this is a free master class on attracting investments from experienced investors.

Table 3 lists the largest venture funds operating in Russia.

Table 3. Large Russian venture funds

You must understand that if you want to make a profit from your project, then it must at least bring 40-45% profitability, because you will give 30-35% to the vendor. Are you ready for this challenge?

Pros: the ability to find funds at the initial stage, without collateral; The very concept of venture investment implies that the investor may lose money if the project fails.

Minuses: not suitable for all projects, long and complex competition for obtaining funds, high investor share in the company.

Video – Conference of the Foundation for the Development of Innovation and Initiatives

After watching this video, you will learn how to bring an IT startup to the international venture capital market. And also how, where and at what rate to ask for money for innovation

Grants and subsidies

The most desirable type of attracting investment for any beginning businessman is, of course, a grant or subsidy. After all, you don’t have to give them away! Or it is necessary, but after a certain period and without interest. Therefore, those wishing to receive such financial assistance from outside are a dime a dozen. However, in order to qualify for a grant or subsidy, your business project must bring not only profit to you, but also benefit to society. Only projects with a social impact receive the attention of non-profit foundations.

Funds that provide support to new and small businesses are divided into state and non-state.

Target areas subsidized by government grants:

• Agriculture;
• Innovative technologies;
• Education;
• Advertising and Marketing;
• Tourism;
• Healthcare;
• Production of goods for export.

Non-state funds subsidize the following industries:

• Agriculture;
• Innovative production;
• IT and telecommunications;
• Internet trading;
• Healthcare;
• Social business;
• Creation.

Let's look at the most interesting measures of state and non-state support for small and new businesses.

Pros: Grants received do not need to be repaid; subsidies are given either on a non-refundable basis or without interest.

Minuses: This type of financing is not available for all projects; you will need to regularly report for the money received.

The investor has invited you to a meeting. What's next?

Armed with a business plan and project presentation, you rush to negotiations. At this stage, the main task for you is to talk about your business idea as convincingly as possible. And sell it for as much as possible.

Meeting with an investor is the most important step

Yes, yes, that's not a typo. During negotiations, you sell your business idea and your efforts to implement it, and in exchange you receive money at a rate of return that suits both you and the investor.

Negotiations are by no means a friendly meeting, but a kind of battle with an investor for future profits, so remember a few important rules.

1. If possible, carefully study the bank, fund or person you are approaching for money. What businesses does he invest in? How does he feel about risk in investing? What goals does he pursue? Use the information received in negotiations
2. Always focus on the benefit for the investor, not on your financial goals
3. Prepare a rough structure for the meeting and think through answers to possible questions.
4. During negotiations, write down all the key points, otherwise important information may simply fall out of your attention later.
5. Be flexible, consider investor offers
6. At the end of the meeting, write down all agreements reached. Prepare supporting documents together.

One of the important topics of negotiations with an investor will be the choice of investment form. There are two such forms for small businesses: lending and buying out a share in the business. Let us consider in Table 4 the comparative characteristics of the two forms and determine the pros and cons of each of them.

Table 4. Characteristics of various forms of investment

The final stage of negotiations with a potential investor will be the conclusion of an investment agreement. Most often, you will be offered an agreement developed by the investor and, accordingly, focused on his interests.

Read all clauses of the contract carefully and ask clarifying questions. Feel free to make corrections. It’s better to show the contract to a lawyer to avoid pitfalls.

Video - Master class on finding investments

Look at the secrets of finding a development investor from Sergei Gribov. At the master class, he explains the entire practice of obtaining investments, based on his fifteen years of experience in creating startups in countries such as Israel, America and Russia.

Who did it?

Yes, attracting investment in a young, growing business is not easy. Yes, in exchange for the funds received, you will have to give away part of the future profit. But who will stop it?

See how inexperienced aspiring businessmen like you achieved success. Do you see any familiar companies among them?

Max Levchin, company founder PayPal, attended Champaign College with a degree in communications security. He never even thought about creating a world-famous online payment system, but while still in college, he became the founder of three companies in the field of information technology. True, none of them achieved success. Then he had such a bright business idea that he dropped out of school and moved to Silicon Valley to bring it to life in the most suitable place for this.

PayPal is a well-known payment system that developed thanks to a well-formulated idea

In the summer of 1998, he was living in a friend's apartment in Silicon Valley, without funds, without certain prospects. One day Levchin went to a lecture at Stanford University. Peter Thiel was reading it, and Levchin wanted to take a look at the man about whom he had heard so much. After the speech, Max approached him to tell him about his idea and ask for expert advice. Til listened to the young man with interest and invited him to a business breakfast.

Levchin described his idea to Til, and he offered to implement it by investing some money. It turned out that Peter Thiel ran a hedge fund.

Yahoo! began as a site where two Stanford University graduate students, David Filo and Jerry Yang, collected web links to documents on various topics. Passionate about their idea, the students added new links to the catalog every day, and soon the catalog website became popular. At the end of 1994, Young and Philo decided to create a commercial organization for their website and asked Tim Brady to write a business plan. Brady was in his senior year at the time and therefore turned the business plan into Yahoo! graduation project.

At the 1995 San Jose Electronics Show, Yahoo! placed its stand. There was not a single Internet project among the event participants, so the Yahoo! investors noticed. A few weeks after the exhibition, the students found funding for their company and moved into a real office (they had previously worked in a trailer on the institute's campus). The venture fund Sequoia Capital acted as an investor and managed to receive $1 million as an initial investment

But this is America, you say. Such ideas are born there, such capital circulates there, you say. And you will be wrong. Here are examples from Russian reality.

The founders of a large online labor exchange, Denis Kutergin and Alexey Gidirim, worked for a long time without funding, seeking their own funds. The breakthrough came in December 2010, when YouDo entered the top ten Internet projects of the Web Ready competition. Within a few months after this, the company was assigned an investment attractiveness index of “A” in the StartupIndex rating. In 2013, she won a competition announced by the Pavel Durov and Yuri Milner Foundation and received $1 million for development.

In 2016, Alexey Moiseenkov, an employee of My.com (a subsidiary of the famous Mail.Ru Group) developed an application for smartphones Prisma, allowing ordinary users to create photographs in the style of Van Gogh, Munch, Marc Chagall and other famous artists. Alexey skillfully found funding for his project. He showed the idea to the Deputy General Director of Mail.Ru Group, who became interested in the project and introduced Alexey to the founders of the Gagarin Capital fund and private investors. Today Moiseenkov is a dollar millionaire. Prisma is not Alexey’s first startup; before becoming a successful startuper, he managed to hit a lot of bad points for himself.

Prisma - an application for creating a picture from a photograph using neural networks

As you can see, it is quite possible to get investment, but it requires persistence. And a little luck.

Conclusion

In conclusion, we note that you do not have to concentrate on any one way to attract money to your business. You are a generator of business ideas, so be creative to the end! You can, for example, receive a subsidy for business development from the state, become a resident of one of the business incubators, invest your funds and attract friends, making them business partners, and make up for the lack of funds with a bank loan. And this is just one of the options.

Take action, don't give up and may the force be with you.

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In the modern world, more and more interesting business ideas are appearing that require implementation. But to promote any project you need money, which the author of the idea does not always have. Therefore, the question of finding investment to start a business is relevant. However, entrepreneurs and companies starting from scratch risk facing strong competitors in their chosen niche. And in order to implement the idea and find the necessary funds for this, you need to know all the tricks for attracting investors.

• Where to look for investors
• Attracting investment through the mainstream
• Platforms for finding investors
• How to act. Basic rules for attracting investors
• How to make a project attractive: what an investor will pay attention to
• How to prepare to communicate with an investor: from pitch to conclusion of an agreement
• How to prepare a presentation correctly: 5 tips for investors

We will tell you how to make your project attractive to investors and what needs to be done to achieve this. The one who walks will master the road, but the business is the one who is ready for something new.

Where to look for investors

There are many more opportunities for finding investors than it might seem at first glance. And you can find money by resorting to both long-existing investment methods and modern ones that appeared with the advent of the Internet.

Classic ways to attract investment

You can get money for your business through investment funds, small business assistance funds. This is quite a difficult task. In addition to the fact that a beginning entrepreneur must find serious reasons for receiving investments, he must invest part of the funds himself, but not everyone has the opportunity to do this.

You can ask for help at venture funds, however, it must be taken into account that they provide funds for the development of projects that have prospects. First of all, in the field of innovation and IT technologies.

Another option is a special platform for investing in business projects, a business incubator. But to get money, you need to win the competition and pass an interview.

Successful people can also become potential investors businessmen who would like to have passive income. Finding investors and making them partners is the most acceptable and simple way. And for this you need to be able to present your project well, prove its worth and relevance.

Attracting investment through the mainstream

One of the most popular ways to attract investment is crowdfunding, which is the collection of funds for a business from ordinary people. There are crowdfunding platforms on the Internet designed to allow you to leave proposals to raise funds for a project, or to invest your own money in the project. But to resort to this method, you either need to be a famous person or be able to advertise your idea very well, which, unfortunately, is not done on crowdfunding sites.

You can also try attract investments through cryptocurrencies and electronic payment systems . It should be noted that some popular cryptocurrencies today, for example, Ethereum, were created with user money.

Platforms for finding investors

If you don’t know where to look for investors, then we offer you several large platforms for finding them.

business-platform.ru. Federal business platform. In addition to projects and proposals for the sale of ready-made businesses, you can find an investor base here. The main task of the platform is to connect investors and authors of business projects online.

beboss.ru. The resource provides an opportunity to search for investors for any industry, as well as a catalog of franchises, business plans and business ideas.

napartner.ru. The platform offers various services for startups and investors, such as transaction support. Beginning businessmen will need to describe the nuances of their project so that investors receive as much information as possible.

investclub.ru. The resource offers ample opportunities for finding investments and investors.

rusinvestproject.ru. A platform for searching for investors both in Russia and in the CIS countries.

How to act. Basic rules for attracting investors

There are many people who want to receive investments and the competition is quite strong, so before looking for an investor, you need to learn a few rules.

The more information you provide to investors, the more they will trust you.

If you know how much you can earn, how your project will develop, you can safely go to a conversation with an investor. Calculate exactly how much money you need and for what.

An example is the startup Talkdesk. Its authors proposed the development of cloud technologies that should be used in call centers. Before meeting with a representative of the Silicon Valley venture fund, from which the project team subsequently received $12,000,000, she already had investments from other investors in the amount of $4,000,000 and received $1,000,000 in profit. Investors were captivated by the team’s ability to save money and devote themselves entirely to work. They made all conclusions based on the information provided about the project.

The more you know about an investor, the more opportunities you have to interest him.

What is your preferred communication style? How is business going? How quickly does he make decisions? Any little thing can turn out to be important.

An example is receiving investment for the Glowforge project. Before applying for investments, the author of the project looked at the blogs of the fund’s partners. Studying them, he concluded that when making a presentation, you need to be based not on numbers, but on the product. In total, the project raised $9,000,000 for the production of laser 3-D printers from venture funds Foundry Group and True Ventures in 2015.

The project also set a crowdfunding record, as it was able to attract another $28,000,000 on sites. That is, the author of the project, Dan Shapiro, successfully used the second rule, but most importantly, the third rule.

The more confident you are in your success, the more others will believe in it.

Investors prefer competent and persistent people who know what they want and know how to justify their plans. Prove that you are capable of doing what you propose. Give up the words “I want” and “I wish”, say “I do” and “I act”. Focus on your goals. Correctly set goals will certainly lead to success.

How to make a project attractive: what an investor will pay attention to

According to statistics, out of ten projects only one receives investment. What needs to be done to make your project interesting to investors?

1. You and your team

First of all, any investor will be interested in what kind of people he will have to work with. Both the personal qualities of the author of the project and his motivation and willingness to go to the end are interesting. You must prove that you can move forward despite the difficulties. It is important how you achieve your goal, since any investor values ​​his time and money.

1. Correct calculations

Unfortunately, 95% of aspiring entrepreneurs looking for investors have little idea of ​​what kind of income they can expect. The numbers they present at the presentation sometimes do not correspond to reality. Constantly growing sales and million-dollar profits offered by project authors often have nothing to do with the real state of affairs. Look for how to optimize costs, indicate what exactly you want to receive investments for.

1. Project potential

One of the most important points in communicating with an investor is determining the potential of the project. The investor needs to know when the project will generate income, how you will identify potential clients, and finally, when the project will fully pay off. Preferably within a year, maximum three years.

To identify potential clients, it’s a good idea to run a crowdfunding campaign. If users are interested in your project, you will have a chance to attract interest from investors.

How to prepare to communicate with an investor: from pitch to conclusion of an agreement

There comes a time when the investor believes that he should choose your project. On average, it takes businessmen 3-9 months from meeting an investor to concluding an agreement. It is possible that you will have to prepare more than one version of a business plan and answer many questions for which you are not quite ready. Therefore, carefully prepare not only for the presentation, but even for a short meeting and telephone conversation. Each stage of communication requires its own preparation.

Stage 1. Getting to know each other

It can be either full-time or remote. The main thing here is to interest the investor in your project. To do this, you can use the following methods.

Elevator pitch or an elevator pitch. The short pitch was so named because businessmen and startups would catch potential investors in elevators and present their business idea to them in 30 seconds. Your mini-presentation must include:

• the problem you are solving;
• Product Description;
• monetization method.

The main thing is to attract attention, for which you can use interesting facts or figures. For example, SpaceX's presentation consisted of only three sentences: the cost of launch, which has not been reduced in decades, the possibility of reducing it by 90 percent, and the impressive amount that can be earned.

Elevator pitch can be used at large forums and business competitions.

Correspondence. It is quite possible to establish a connection by corresponding by e-mail. This method works best for individual requests. In addition to the appeal, the letter must include:

• description of the product or services;
• description of consumers;
• business model;
• basis for investment.

Stage 2. Business meeting

Presentation. If a potential investor is interested in an elevator pitch or your letter, he will invite you to a personal meeting, for which you also need to prepare. When going to a meeting, you need to decide what you specifically want from it. If you receive money, you need to say so. This call to action is quite applicable and works.

Now about the presentation itself. It should be short and bright. It's good to follow the 10/20/30 rule. Try not to dwell on the details and keep it to a 20-minute presentation, which consists of 10 slides and is typed in 30 font.

Appearance. The fate of your project will depend not only on a good presentation, but also on your behavior and appearance. That's why:

• don't be late;
• come in a business suit;
• follow the rules of etiquette.

Your ability to carry yourself confidently, your energy and charisma are very important.

Stage 3. Obtaining financing

Finance, finance and once again finance. For an investor, the main thing is making money. This must be remembered above all. Therefore, even if your project is supposed to “save the world”, but does not have a good business plan and financial plan, a potential investor will not be interested in it. A financial model is needed that can be adjusted by the investor himself. It's good to have:

• results of marketing research;
• letters from suppliers.

It is better to prepare three options at once: optimistic, pessimistic and basic. But, in any case, the model must be carefully verified. Only in this situation can we hope to conclude a deal. It is important to show that you know the market well and to convince them of the feasibility of introducing your product. The investor must believe that by investing in your idea, he can not only quickly recoup his investment, but also make good money.

How to prepare a presentation correctly: 5 tips for investors

Presentation is very important, on which the receipt of investment will largely depend. Many entrepreneurs, when preparing for a presentation, do not fully understand the interests of investors and do not know how to properly present their project. What points should the presentation contain?

1. Problem Definition. If it exists, then it needs to be confirmed. Demand confirmation must be determined by real numbers.
2. Solution to the problem. Your decision cannot be the only correct one. But it's your decision, and you need to convince the investor that it works, that people are willing to buy the product. It is best to come to investors already with certain results. To do this, you can take the following steps:

• do product testing;
• notify about changes to the project;
• present the available results.

1. Search for opportunities to sell the product. Willingness to buy does not mean that the product will sell well. Even if a person buys a service or product once, there is no guarantee that he will contact you next time. Therefore, you need to take into account profit and loss per customer, the so-called unit economics, as well as ways to attract and retain customers.
2. Searching for a market and determining a strategy for entering it. We need to look for those markets that are growing and not disappearing, such as the cell phone repair market.

If the presentation shows how your income will grow in 3-5 years, then your financial model will arouse the interest of investors.

1. Determining the investment amount. At the last stage, you must tell the investor what you need the money for and how much you want, as well as how much you are willing to invest yourself.

The right choice of investor, serious preparation for a conversation with him, as well as a good presentation of the project will help you get a chance to invest in your project.

Beginning entrepreneurs often face a lack of funds, without which it is impossible to implement a promising business idea. In this case, you have to look for an investor who will agree to invest money in your business. This is a difficult process that requires persistence, patience and self-confidence. You will learn how to find an investor from scratch for a small business in this article.

How to attract an investor?

Any investor strives to increase his capital. The interest on deposits offered by banks and other financial institutions does not suit people who want their money to work and make a profit, since such dividends barely cover the level of inflation. Therefore, investors are looking for businesses in which they can invest capital and thereby provide decent passive income. If you are interested in how to find an investor for a small business, first of all you need to perceive him as a potential partner, since you are investing an idea into the business, and the investor is investing his money. Accordingly, this should be beneficial for both parties.

Experts believe that finding an investor for a small business is not difficult. The most important thing is a competent presentation of the idea, which can convince him that this type of investment will significantly increase his capital.

In an investment question, the following questions need to be addressed:

• Demand and uniqueness of the product;
• Investment size;
• Payback period of the enterprise;
• Calculation of future profits and guarantees.

If you can find convincing arguments for all of these positions, the investor will be convinced that your idea will indeed bring good profit and ensure its financing.

Where to start your search?

1. Step #1. Make a clear plan that you will present to potential investors. With its help, you must convince the person that your strategy will allow you to make a good profit. The document must contain a complete description of the company, its prospects, and place in the market. Also, do not forget to attach a calculation of the initial investment and the approximate payback period;
2. Step #2. Decide on the type of investor. For example, you are interested in how to find an investor who will allocate funds to achieve certain goals - to purchase equipment or expand production at a certain interest rate. Or maybe an investor will suit you who will give you money, but will ask for a share in the business in exchange. Choose the most acceptable form of cooperation for you and indicate it in the plan;
3. Step #3. Seek help from experienced businessmen who have been working in your chosen field for a long time. They can give you sound advice on attracting investors to your business;
4. Step #4. Find specialized sites on the Internet where aspiring entrepreneurs are given the opportunity to present their project to business angels. You place your request for financing an enterprise, after which investors contact the author of the idea that interests them.

Where to look?

Before finding an investor for a business, you need to carefully prepare and make a detailed description of the future enterprise. It is advisable to involve experienced economists in this matter who will help you draw up an action plan. It should outline the production technology, the level of competition in the market, marketing research, and markets for finished products. You also need to attach financial calculations and detail the payback period and future profits.

Now let's try to figure out where to find an investor for a small business. There are several options to help you resolve this issue:

• Relatives and friends. Since finding an investor to invest in a business idea is not so easy, try to involve your friends and relatives in this business. This is an ideal option that allows you to minimize all risks. If the implementation of your project does not require large start-up capital, you can invite your friends to invest their savings in the business for a certain percentage of the profit;
• Businessmen. In any city there are experienced entrepreneurs who have made a fortune and want to invest their capital in some profitable business. Try to get a long-term loan from them on favorable terms or offer equity participation in the business. The second option will significantly limit your freedom of action, so think carefully before taking such a step;
• Funds. Another option for finding an investor for a business from scratch is investment funds, as well as funds that assist small businesses. But in order to receive money from such an organization, you need to prove that your project is viable. In addition, an aspiring entrepreneur must have his own start-up capital, which he plans to invest in a new enterprise. This option is more suitable for businessmen who want to find an investor in an existing business. To get a positive answer, you need to draw up an enterprise development plan and conduct a thorough analysis of your company’s work. It is also necessary to constantly monitor the performance of public investment funds. They often hold various competitions that allow them to select the most promising projects;
• Venture investing has become widespread in many developed countries. If you want to find investors for business development in this way, you should remember that these organizations invest money only in promising risky projects in the field of science, innovation or IT technology. Sometimes venture funds finance the service and trade sectors. But at the same time, they expect a share in your business and stable profits. As a rule, such funds finance the enterprise for several years and then sell their share to the owner;
• Business incubators. This is a special platform that is intended for the implementation of various projects. To find an investor for a business in Ukraine in this way, you need to provide a competent plan and pass an interview or win a competition;
• Banks. If you don't know where to find an investor for your business, try getting a loan from a bank. But, unfortunately, getting the required amount is not so easy, since credit institutions usually impose serious requirements on borrowers. You will need a guarantor, collateral and a package of documents. If you do not comply with the bank's requirements, you may not receive a loan. This option is more suitable for implementation.

If you want to find money for your business, be patient. All candidates must be carefully considered and possible risks taken into account. In this case, you can choose a reliable investor who will help you open a profitable enterprise.

Foreign investors

Some entrepreneurs who cannot find money to implement their idea in our country are trying to attract foreign capital to the project. Let's figure out where to find a foreign investor for a small business?

It is pointless to rely on your past victories in various competitions and festivals, since foreign investors are only interested in real financial achievements. You must offer them a project that, with additional funding, will bring in millions in profit, preferably in dollars. It doesn't have to be some kind of technological idea, but if it shows high profitability, you can safely count on the fact that investors will pay special attention to you. Believe me, no one will invest in your ambitions. Therefore, if you are not confident in your abilities, look for interesting ones, the implementation of which does not require large start-up capital. This is an ideal option to start with.

Video on the topic

By franchise

Now let's talk about how to find an investor for a franchise business. This investment tool has been tested by hundreds of entrepreneurs. The main advantages of a franchise are a quick start and entry into the market under the wing of a well-known brand. Borrowed funds for a franchise can be obtained from a bank. This is the only case when banks give money to start a business. In addition, they provide a deferred payment on the loan for 6 months. Thanks to this, the entrepreneur can direct all his efforts to business development and repay the loan from the profits received. To get such a loan, it is enough to have one guarantor.

Help from the state

If you want to implement it, you can try to seek help from the state. There are special programs that allow you to receive a grant to start your own business. This is targeted free assistance, which is quite enough to start a small enterprise. This option is perfect for beginners who are looking for ways to start without starting capital.