How to Find Small Business Investors
Whether you’re just starting out or you’re established and trying to grow, every small business needs money. You can get money a few ways. First, you can work off your own personal savings. This is referred to as “bootstrapping” and is how a lot of small businesses initially get off the ground. If you need more cash than you have on hand, though, you might want to consider finding investors.
There are different types of investors, including angel investors and venture capitalists. Whether to go with a venture capital firm or an angel investor will depend on the size of your business, its growth potential, and how far along you are in your venture.
Once you decide what type of investor you want to target, you have several options for finding investors who will be interested in your specific business. Make sure you understand what investors look for when they invest before making your pitch.
Where to find small business investors
1. Look close to home
A lot of investors are interested in putting their money back into their community, and small businesses often have success when they start looking for investors locally. Stop into your local Chamber of Commerce or Small Business Administration (SBA) office to see if you can get information on local investors.
2. Join an investor network
Investor networks, like the one you'll find through CapitalRaisingClub.com, are great sources for investors. You can list your project for investors to find and search for investors in your specific industry or niche. Our network can save you time by matching you with high-worth investors who are looking to invest in projects like yours.
3. Search crowdfunding sites
Crowdfunding sites have recently opened up so non-accredited investors can invest alongside accredited investors. This opens up your pool of potential investors. You might be able to secure funding by having a lot of investors who invest a small amount of money, instead of getting one or two investors who invest a lot of money at once.
4. Look into government programs
The Small Business Investment Company (SBIC) is run through the SBA and provides small businesses with funding through either debt or equity. Generally, investments are made over a three year period.
5. Talk to friends and family
If you have friends and family members who have the money to help you jumpstart your business, talk to them! You might be able to offer them different terms than you would an angel investor or venture capitalist. Instead of a seat on the Board of Directors, for instance, you might be able to offer them goods or services in exchange for their investment. You also might be able to get a loan instead of an investment. Loans from family members and friends can generally come at a much lower interest rate than you would get from a bank.
When working with friends and family, treat every deal like you would any other business deal. Get terms in writing, and make sure you make on-time payments if you get a loan.
Are you ready to move your business forward? Get started by listing your project on CapitalRaisingClub.com today!