Finding The Right Investor For Your Business As An Entrepreneur

Every entrepreneur who experiences success early on learns to how wise it is not to get fooled into thinking a meteoric rise is going continue indefinitely. Some form of bust inevitably follows every boom; it may not be a costly event in the long run, but if the rug is pulled from under you, you could land pretty hard. There will be a time in an entrepreneur’s path, where it there will be an opportunity either acquire capital or watch their business stagnate and perhaps even deteriorate. The safest option is to find an investor who believes in not just the idea, but the people behind the idea as well. Easier said than done right?
Comprehending the different options
There are of course many different paths to enlightenment, but many small businesses choose to go down one of three pathways.

• Angel investor: The rarest but most dynamic option, is to find a wealthy individual, who wants their money to make money. In other words, invest directly in your business without entities acting as the middlemen. These are individuals of a high net worth, who are seeking lucrative returns through their private investment into your small or startup company. Dependent on the agreement, they could invest in small amounts, or in large amounts.
• Private equity: This option covers multiple investment types which are made up of private individuals and or, privately-owned institutions. They seek to purchase a company or fund a project which they believe can offer returns to their clients adequately. Similarly, they may also make a private investment into your business.
• Venture Capital: Investments are different in nature. They’re usually designed to only fund startup companies who show the potential for substantial growth. This option may come with the added bonus of providing you with expertise and assistance in business planning.

The meeting with your investor(s)
Set up a professional meeting with the help of a conference management team; coffee shop meetups are best left in Hollywood dramas. As with all negotiation narratives, it will involve a push and a pull. You must first devise a shortlist of the things you want from your investor, think about what is crucial to the growth of your business and what kind of logistics you will need to facilitate your profit margins growing. You must also have a clear picture in your mind, of what you’re willing to give in return.
 
Proceeding points
You’ll want to ask them about their most recent investment and what their typical expectation is of startup CEOs. Ask them how they would like to be involved, if at all. This will be a tricky segment in the negotiation as you may run into a hawkish type of private investor. Determine what your red lines are, and but don’t give away your hand of points you will not go beyond; at this stage, they aren’t a partner so act like you would at the poker table. The key is to focus the talk on the specific area in which you want to use their investment money and the likely returns that should follow. Keep it simple and above all, provide sufficient details of what your growth plan is.