Are you looking for startup investors or a business partner with money? If YES, here are 9 tips and places you can find business partners and investors.
The early days of starting a business when you have very little cash, a lot of things to do and maybe no one to help you out, can be very overwhelming. For this and many other reasons, you may want to bring in someone to help you out in the funding and running of the business.
Whether your business is into real estate, manufacturing, production, mining, technology, sales, communication, entertainment et al., there is one common problem that can bedevil the business which is lack of, or limited access to funds. Irrespective of the location of your business, money still remains a very crucial and cogent exigency that every business needs.
Here are a few options that are available to people who are in need of individuals or businesses that have a lot of funds to spare that can partner with them to take their businesses to the next level.
How to Find a Business Partner or Investor With Money
1. Angel networks: they are also known as private investors, angel funder or a business angel. They are opulent individuals who are willing to invest in private businesses or startups with the aim of making profits or/and owing a part of the business. In some cases however, these angel investors may be willing to partner with the business owner.
3 Places to Find an Angel Investor
An angel investor will invest in a business either individually, through groups or through networks. Many angel investors are current or former business owners and as such they are more hands on. They will want to have a say in major decisions and also provide advice because of their wealth of experience.
Angel investors also have a tendency to invest in certain businesses so try and find out previous investments they’ve made as this will inform your decisions when making a choice of a potential angel investor. Angel investors can be found through any of the following ways.
- Online platforms: these are websites that present small business in need of investments. They prospective investor simply goes through the portal and identifies a business that they will like to fund. These online platforms include Angelsoft, Keiretu Forum, New England Network etc.
- Angel groups: these are organizations that are made up of individuals who pool their resources together in other to invest in businesses. According to the ACA (Angel Capital Association), there are over 250 angel groups in the united states of America alone. The ACA website provides a listing of all the angel groups in the United States. You can go to their website and submit a request to any of them.
- Individual angels: these are angel investors who neither belong to angel groups nor peruse any online platform seeking for whom to fund. A recent study indicates that there are about 150,000 active angel investors in the United States.
Finding individual angel investors is usually more difficult than finding them through groups or online platforms. You can approach someone who has a connection to an angel investor and ask for him/her to introduce you to the angel investor.
Lawyers and accountants who work with companies, venture capitalist, incubators and of course angel investors in your location can be of great help. Once an entrepreneur has made his choice of a potential investor, he can then network and introduce himself to the said investor.
It should be noted that most angel investors are only interested in local investments. They want to invest in businesses that they can see, mentor and monitor. So, sending out an email blast to angel investors far away may just be an exercise in futility. Also having a rapport with an angel investor or going through someone is an added advantage as angel investors invest in not only ideas but the people behind them.
2. Crowd funding sites: these types of websites provide you with a lot of investors and potential business partners who are members of the general public that are interested in being part of the next successful business.
Each crowfunding site is unique that different from the others that exist in the sense that they have different focuses and incentives that encourage partners and investors to come around. Examples of these Crowdfunding websites include Kickstarter, Pererbacker, Indiegog et al.
3. Professional social networking sites: LinkedIn still remains the leading social networking site for individuals who are looking for partners that have a lot of money to spare. A simple search of the term “angel investors” on linkedin.com will generate thousands of potential angel investors. Furthermore, Angelist (a website) matches entrepreneurs to investors.
There are over 25,000 investors available on their website. With the website, you can connect with a wide array of wealthy people, network with them and then convince them to partner with you in your business. Others professional social networking sites to consider for investors and partners include EFactor, Xing, Plaxo Cofoundr et al.
4. Venture capitalist (VC): these are usually professional public or private firms who provide funds to businesses with high growth potentials but with high risk tendency. The funds they provide are usually for businesses that are already up and running but need more money for expansion.
How to Find a Venture Capitalist (VC)
Venture capitalist prefers to invest in businesses with already existing track records and as such startups are hardly ever favored by venture capitalists.
First, you have to carry out extensive research in other to find out the venture capitalist in your region or close to you that are willing to invest and partner in your business, willing to invest the amount you have in mind and at the stage of development of your business.
More often than not, the specification of business that they are willing to fund is available on their website. This is save you the stress of trying to contact them if they are not into your area of specialization.
The website of the National Venture Capitalists Association offers general information about venture capitalists and a list of venture capitalist that are based in your locality. In addition, they also provide advice and statistics about venture capitalists. Alternatively, you can also use a search engine to search “venture capitalist [your location/business type]. When you get the information you seek from their website, send them a mail.
5. Family and friends: friends and relatives who are well to do can constitute a viable source of partnership for your business. They know, believe in you and see your determination and are more likely to easily support your endeavors if they have the wherewithal.
Even though an informal relationship is likely to exist between you and friends and relations, partnership with them should be viewed through a business prism; that is, the partnership will be treated like that of any partnership with an non-family member. Friends and relations are more likely to offer flexibility than a normal investor though. For example, they may be willing to be paid with the goods and services you produce instead of in monetary terms.
Also, you can ask them for a loan instead of asking them to invest. If they offer you a loan you won’t have to share the ownership of your business with them. Furthermore, if the business fails, a declearance of bankruptcy will wipe away the loan.
6. Private equity firms: these are firms that have the capacity to give individuals access to a lot of cash. Usually they invest in those businesses that are in their early stage that they perceive to be very profitable in the long run.
Their main aim is usually to sell their stake a few years after investment to reap a significant profit from investing in the business. According to Private Equity Network, private equity firms invested $347billion in 2012 across nearly 2,100 companies in the United States.
7. Personal marketing effort: in addition to the various options that have been mentioned in this list, a business owner in need of a business partner with money can help to advertise himself to potential partners.
What this implies is putting yourself in places and situations where potential well-to-do partners can take an interest in you and your business. This includes making use of websites, social networking sites, guest posts on established blogs, personal blog post, forums like Reddit and Quora, normal media outlets, et al.
In conclusion, you should not get discouraged if you are not able to get a business partner with money on the onset. Even if you suffer rejection, keep on trying and one day you will find the right partner for you because if you quit now, the dreams you have for your business may never come to fruition.