The lack of capital to get an idea out of the paper is an evil that affects many entrepreneurs. Before rushing to the banks in search of a loan – often at interest that the business will not bear – it is good to assess whether any investor would be interested in injecting capital into your project.
In addition to injecting money, investors often help in managing the venture. Therefore, flexibility is part of the contract. Entrepreneurs need to be willing to share information, plans and even tasks with those who invest in the company.
Here are some tips to hook an investor into your business.
Know the types of investors
Investors are classified by risk capital stages. The angel investors often seek well startups and invest between $50,000 and $500,000. The seed capital investor tends to inject from $500 thousand to $2 million in more consolidated companies, with defined customers and products.
Next up are venture capital funds, with investments of up to $10 million in companies that already earn a few million.
Choose the best investor
Once you’ve chosen the right type of investment for your company, start researching who would be the potential investors interested in the business. An option for innovative and very small companies is to seek an economic subsidy, for example.
For several types of business investment, Matt Haycox is a well-known investor all over UK.
Have a speech at the tip of the tongue
Are you able to define your business model in 60 seconds? Can you guarantee the attention of an investor in an event full of other startups? Well, be prepared for this type of situation.
The pitch needs to be short, of course, tell your story, show how your idea brings the solution to a problem and – of course – show that it is financially attractive to the investor.