After all the preliminary work is completed, it is necessary to proceed to the procedure of finding an investor. It is necessary to work in several directions at once, making acquaintances both in the sphere of entrepreneurs and investors, namely:
Close people, friends, acquaintances-
One of the most controversial ways to raise funds. Suitable for creating a small business, promising familiar people return on their investments when the business starts to generate income.
At the same time, among friends and acquaintances, you can really find like-minded people who might be interested in the idea, and create a whole team that will be able to share all financial losses and compensate for each other’s shortcomings.
You can borrow money from relatives to open your business if you need a small amount, and there are any guarantees of its return.
Funds-.
There are two types of funds that can help in finding investments for a business: small business investment funds and other funds created in your country to support and finance innovation and start-up. Regardless of the type, it will be extremely difficult to receive money in such funds.
“We need to interest managers in their business. And if in other cases an innovative idea, an advantage over competitors and a fast payback can outbid the average or even low profitability, then in this case the return on investment is put in the first place. ”
Investment funds are interested in only one thing - profitability. They are willing to invest their money with great risk in the company, which will bring them great income. But if a businessman talks about long-term investment without guaranteeing profits in the first few years, such a business is unlikely to be funded.
In order to assess the prospects of their own investments, the fund will need time and maximum information that you can provide. The group of analysts will analyze, therefore the more information - the higher the chances of getting money.
Investment funds - the union of many investors who invest free cash in order to make a profit.
And often these investment funds have less money at their disposal than a few private investors, who are also willing to invest their money in interesting ideas, if only someone is interested in them. But it should be understood that it is much easier to apply for investments in an investment fund than to a private investor, because for the first you just need to contact the company, and in the second case, somehow find contact with a very famous and rich person.
Public funds - one of the most profitable options for obtaining money, if the idea is truly innovative. Periodically, competitions are held, the winners of which can receive a grant for which entrepreneurs will be able to implement all their ideas. Enlist state support, if there is such an opportunity - this is the best option.
Successful businessmen-
One of the best and most profitable ways to search for investments is to work with successful businessmen of a city or region. Regardless of the scale, in the region one can find many successful businessmen who have already passed this way, have profitable enterprises and free cash. It will be enough to interest them with your idea and your personality, and then they will invest their money in an interesting project.
At the same time, one of the obvious advantages of working with successful businessmen is that they can train and explain some points they themselves have gone through. Many entrepreneurs are happy to take under the patronage of beginners, explain to them how to cope with difficulties, minimize costs, make a profit. Especially if cooperation can benefit both parties in the long run.
Cooperation usually takes place under two conditions:
• In the form of a loan;
• In the form of buying a share in the business.
“The second option is preferable for both parties. He assumes the participation of the investor in the development of the company; this makes it possible to avoid most of the mistakes and take advantage of the connections and relationships of a more influential person in order to set up his own. ”
If a businessman cannot help with finances, it is recommended to ask him which people he knows will be able to help and become interested in the idea. Such a small psychological trick will allow you to learn about other businessmen, and with a recommendation from one of your colleagues you can count on something more.
Crowdfunding-
A way that is suitable only for startups, and not in all areas. Crowdfunding-financing of interesting projects by individuals. Often this is investing money for some kind of reward. Leading companies that are engaged in the development of any interesting new products for retail and wholesale, are looking for free cash.
Banks-
If all of the above ways to attract investors did not work, you need to apply for loans from banks. Different credit organizations have different requirements for potential borrowers, but their essence is as follows:
“Banks do not need maximum profitability. They are interested in a stable cash receipt and loan repayment. That is why credit organizations will study your business plan for a stable income and, accordingly, a refund. They are more interested in guarantees than profitability. ”
It is dangerous for an inexperienced entrepreneur to take a loan from a bank, especially if the business idea is rather risky. If the idea does not burn out, the bank will by all means demand the return of funds, up to the realization of the borrower's property.
That is why it is worth taking loans for a small business that pays off in 4-5 months and will then be able to generate income. And if it fails, the financial blow will not be as strong as the loss of money for the implementation of a medium or large project.
Venture investments-
One of the most popular and effective ways to raise funds for businesses in innovative areas. Venture investments - investments of funds of venture funds (investor associations).
The nature of venture investments is their high riskiness. They provide cash to many companies that can change the world with their innovative ideas.
Venture funds can also finance ordinary entrepreneurs. But the main condition will be dynamic development and continuous expansion.
Venture funds - a kind of motivation for the constant expansion of business, spheres of influence and products. The most vivid example of a company that existed at the expense of venture capital funds is Apple.