With banks shying away from putting their money into new businesses and the government putting stringent rules in place in lieu of helping you with funds, getting funded by the 2 otherwise most obvious choices has become very difficult. Therefore, in order to find a suitable investor for your business (small or otherwise); you have to turn towards private investors.
Top Tip #1: Idea depending on the business type
VCs (Venture Capitalists) and Angel Investors always see businesses in terms of profits. The most obvious questions to expect is how much amount of return is your business capable of and you just can’t give them a random figure! These kinds of investors have a strong market link and they are qualified enough to see through the idea and the potential of the same. Maybe they can’t judge the exact figures but they can certainly make an assumption close to the actual figures – thanks to their information network and networking skills.
That straightaway means that you have to take your idea very seriously; in fact, have a working prototype of the same if possible and then approach the private investor. When they sit with you, they will have surely completed their homework on the potential of your project – time to do yours!
Top Tip #2: Networks, Contacts and Recommendations
When setting up a meeting with private investors, networking helps, especially if you have a connection with the top management level. Not necessarily that you’ll have a personal contact with them but you can always find someone ‘market credible’ who has links to the top. This would undoubtedly make your files moves faster and getting the funding easier than you thought of!
Top Tip #3: Credit History
This might be the very reason as to why you approached private investors and not banks. Banks today, simply refuse to lend money to people who do not have a credit history and therefore the private investors. But there is a reason as why the following has been mentioned here. This is because having a credit record will make things faster. Remember one thing – these are investors who are interested in your business only because they see a fatter profit in a shorter time as compared to other sources if they had invested their money into.
Top Tip #4: Oiling Works!
This works every time and every where. Apart from sounding convincing, if you show importance to the person opposite you, there are chances that they will be flattered. Again, flirting and empty flattering is a strict no-no. Take interest in their business and they will take in yours! If you’re good at people management, chances are high that you’ll get the fund on your terms!
The internet is a great place to start with because of the fact the information about everything is available just at a click of a button. Private investors including the angel and the VCs have their websites from where you can setup an appointment with them for getting funded.