How Can I Find the Right Investor For My Business Needs?
This is one such question comes to the mind of every new entrepreneur. Choosing the right investor is something challenging as you have many options out there to avail the required funds like angel investors, business loans, venture capital, equity partners etc. When you are ready with your business plan, the next step is to select the right investor. Here is where you may get stuck up for a while. However, don’t worry, in this article, you will find some tips to choose the right investor for your business.
Before approaching the investor, there are certain significant factors that you need to consider such as the stage, industry, business location etc. Let’s have a look in to these aspects:
The stage of business your company is in, matters a lot when you are searching for an investment. The fund requirements will also vary based on each stage of your business, whether it is in the early or seed stage or in the mid stage. Pre-Prototype of prototype stages are riskier for the investors than other stages, but their ROIs are higher. When you want fund at the later stages of your business, then there is a less risk for the investors as your business is already established and there will be more return possibilities from it. If you are planning for a fundraiser at the later stages of your business, it is better to approach a private equity firm who can help you in the expansion of your business.
Even if your company suits with investor stage preference, it may not be suiting with the geographical location preferences of a specific investor who is interested in investing in your firm. Hence, the geographical preference of the investor has to also match with the stage preference of that investor. If you are a smaller firm, you can search for local geographical investors who can provide you enough fund. When the business is operating globally, you can go ahead with the option of finding international investors.
Most of the investors prefer to invest in such industries where their portfolio company is involved in. Hence, while choosing an investor, it is better to look for an investor within the same industry who have expertise in the industry. You can check the investor’s industry preferences from their portfolio company or from their websites.
Another important thing you need to look in to is to check whether the investor is actively involved in investing for different firms or not. This can be known from the different press releases whether they are active investors or not. You can have a detailed search on this matter and is always better to approach active investor otherwise, there is no point in sending your information to them.
Know latest news about investors
It is essential for you to know the status and portfolio of the investor you are looking for. You can look for reliable sources of information like venture capital so that the latest new about each investor will be given there. Have a good check on their details and approach the reliable and active investors so that you can ensure you will get enough fund from them at the right time.
To choose the right investor, these above factors are needed to be considered. Even though finding an investor who matches with all your stage, geographical and industry preference will be a tough job, but still is not impossible! Go ahead with a better investor and ensure you get enough fund for your business.