How to Find Investors for You to Start a Business
For entrepreneurs who want to develop their business, of course they have to understand how to find the right investors. With investors, capital for business development will be safer so that various business plans can proceed in the future.
Looking for investors is not something that can be done easily for every business person. Before looking for investors, of course you need to know the business goals and what the current position of the business is.
After knowing this, look for investors who you can get in various ways. Read this article to find out various things that can help you find suitable investors for your business!
Definition of Investor
Investors are the term for individuals or institutions who invest capital in a business. There are many different purposes for investors to invest money in a business.
In general, investors in a business play a role in providing the funding needed so that the business can continue to run and develop.
The investor system in a business usually applies in the long term. If investments are made in the short term, they are called traders.
So basically the difference between investors and traders generally lies in the duration of providing capital to a business.
Types of Investors
Looking for investors is one of the wise steps taken by business people if they want to develop a business beyond what they have. But before looking for one, it is better to first know the various types of investors that exist.
The following are several types of investors that you can meet in the field:
Bootstrapping
Bootstrap is the term for founders who become investors in their own business. Usually bootstrapping occurs when the business you want to run is still in the idea stage and has just been built.
Being an investor in your own business provides quite a big responsibility, but the founder can manage the business himself.
If you are currently still in the bootstrapping stage of your business and intend to look for investors, separate your personal and business accounts. This is to keep your business's cash flow well monitored.
Angel Investors
Angel investors are the term for investors who provide funding in a business in return for share ownership in the business. Finding investors like this is actually quite easy with the right connections.
Usually the angel investors of a business are among the founder's relatives. Its characteristics also provide a one-time capital injection. After that, it is the business person's job to develop the business and gain profits that can be given to investors.
Incubator
Want to find institutional investors? This type is called an incubator system. In this incubator system process, institutions will help business development.
This incubator system funding is open to businesses that are still in the idea stage and are also looking for investors to develop these ideas.
Accelerator
This accelerator type business funding system only has a term of three months. Apart from that, businesses that participate in the accelerator system funding are usually businesses that are already running.
In the process, business owners will also receive training and guidance in managing the business so that in the future they no longer need to look for investors.
Venture Capital
Looking for investors in the form of financial institutions can also be done, but usually this applies to businesses that are already running. Venture capital is the term for financial institutions that have the potential to fund a business but source funds from many places.
Generally, venture capital provides funds to businesses or startups that have the potential to grow their business. This is because the potential for returns above the average will be obtained by venture capital if the business grows from the results of the funding.
How to Find Investors
For those of you who are business people, looking for investors can be done in various ways. The thing you need to know before looking for investors is that you have to really understand the business. After that, there are various ways, here is an example of how to find the right investor:
Using LinkedIn
Activating a LinkedIn account can be the first step in finding investors. It all starts with connection and conversation.
Looking at it from an investor's perspective, of course they will be more open to starting a conversation with someone whose business goals are visible to the public. As a businessman, make sure you look for investors who understand your business and have the same enthusiasm about the future of the business.
Expanding Connections
The next way to find investors is to expand connections. The method can be started by looking for suitable people, it could be someone who does the same business or people who are in venture capital.
Before asking to be introduced to these people, make sure that you are being met by the right person. For example, meeting people who do similar businesses or institutions that have a track record of funding the same and growing businesses.
Get involved in the Business Community
When looking for investors, don't forget where you studied at college. For those of you who are studying business, there is potential for alumni of your department to know someone who could become an investor.
It is necessary to seek information from schools because we never know, maybe there are investors who suit your business.
Exploring Crowdfunding and Brand Building Opportunities
Crowdfunding and building a brand are also important steps to take before looking for investors. Increase promotions to create public knowledge about the brand or business you are involved in. This can be done through the media, creating brand campaigns and many other ways.
This is one of the popular methods used by many startups today when they aim to find investors for future business development.
Before looking for investors, it is important for a business person to maintain an orderly financial system. Neatly organized bookkeeping in a business will make it easier to get investors for development purposes.
After running a business for some time, financial analysis can also be a step in reflecting on the success of your business.
Do you need financial analysis to assess business success and take the right financial steps? Take the financial analysis program at Prasmul Eli. In this two-day program, you will receive reviews of various topics that will complement your business analysis skills. Here are the topics:
- A brief review of the types of financial reports
- Practice and simulation of preparing financial reports
- Analysis of financial statements
- Performance indicators with ratios: liquidity, solvency, profitability, efficiency
- The relationship between each financial performance
- Other things outside financial reports that affect company performance
To find out more program details and register, you can click this link.
