For many starting entrepreneurs it is the – sometimes quite literally – ‘million dollar question’. Where can you find the right investors and how can you convince them to invest in your business? As a young and ambitious entrepreneur, totally convinced of your product, but without the experience or connections it can be tough to know where to start to find investors. The economic crisis did not make it easier for aspiring entrepreneurs; banks are more hesitant than ever to take risks. Even entrepreneurs with a steady business find it hard to get finance for new investments. Luckily there are more and more new ways. Here we present you the five most important.
1) An older, but proven successful, method is to ask your famous rich uncle. Hopefully you have one, otherwise did you think of asking many family members for only a small sum? To already have some investment money from family and friends can make it a lot easier for other investors to join. They are no longer the first to take the risk, but will join others that were already convinced to invest in you. Although you have to be prepared to entangle business and personal together, this is probably going to be the easiest way to success.
2) Did you think of attracting angel investors? Rather than only investing in the business, they will mostly look at the person or team behind the business. For them, probably the most important question is: Can they pull it off? They are prepared to take high risks, but will want to have a huge share in the business. The British television series’ Dragon’s Den and the American version Shark Tank are great examples.
3) Another possibility could be to have a look at crowdfunding options. Internet gave us the opportunity to cut out the middleman, make use of this! The number of crowdfunding websites is growing rapidly; chances are that if there is not yet one in your area, there will be one soon. And don’t forget that place is becoming more irrelevant due to internet as well, so although most crowdfunding websites are still tailored to the American market, it could be that your country is also included in the list of countries that can join. A few other very interesting options are JumpStartAfrica (will be launched soon), Wishberry (for India) and Kiva (globally and oriented towards developing countries)
4) Although chances are that banks are hesitant about investing in starting businesses, there are initiatives that are focused on small loans for beginning entrepreneurs. Asking your regional bank if they also support such initiatives can’t do anyone any harm. Another option would be to have a look on the internet if your government started a cooperation with national banks or other big companies to set up an start-up or SMEs microcredit construction. Qredits (Dutch) is a perfect example.
5) A bit more of a long shot, but could definitely be worth the try, is to look for competitions you are eligible for. If you have an inspiring idea and maybe even a solution for pressing social issues you are definitely in the spotlight of governments, NGO’s and big companies (working on improving their image). In general, competitions are oriented on the area you are focused on or on your field of expertise. Take advantage of this tidal wave for start-ups and SMEs and follow us on Twitter and like our Facebook page to be in the loop for competitions on our portals and around the globe.
Hopefully this will help you a bit further on your investor search. Of course it all starts with having the perfect business plan and credible financial plan to be able to convince any potential investor. On our Gateway Portal you can join others to see how they did it, ask mentors for advice, get into contact with investors and join various competitions. The best of luck with your inspiring road into the world of entrepreneurship.