(By Nina Ngai)
When you’re taking your business to the next level, you may find you need help from an investor. Investors can be invaluable for small businesses, providing not only funds but strategic advice. But where do you find interested investors? And more importantly, how do you approach an investor? Here are our tips that may help you find the right investor for your small business.
1. Know Your Audience
Not all investors are the same. There are many types of investors out there and many specialize different types of capital. Investors may typically be divided into two categories: debt finances and equity capital investors. Try to be sure you’re seeking out the right investor for your business’s needs.
After you’ve determined you’re seeking the right type of capital for your business, research your potential investor. Interestingly enough, there’s a difference between how men and women invest. Women tend to invest in companies that contribute to a common good and reflect their values. Male investors tend to take bigger risks than female investors but focus more on the deal and view investing as part of their “game.” Before pitching to a potential investor, consider tailoring your pitch to your audience.
2. Don’t Just Memorize the Numbers
While being well versed in your company’s finances can be imperative, you may have to bring more than just numbers to your investors. Try to show your investors why your idea is worth investing in; paint a picture on exactly how their investment will help advance the business. However, try to create realistic goals. Don’t project unrealistic profits.
3. Bring Your Personality
Remember, investors are likely investing in more than just your business; they’re investing in you! Investors want to be sure they’re investing in the right people and opportunities. Barbara Corcoran, who has seen countless pitches on ABC’s Shark Tank, admits she is also screening entrepreneurs during pitches. Along with great ideas, she values gumption and a strong work ethic. It takes a lot of hard work and passion for small-business owners to be successful, so consider showcasing it.
4. It’s Okay to Say “No”
Don’t let dollar signs cloud your judgment. Before finalizing any deals, evaluate all offers. Is your decision in the best interest for your business? Along with longevity, you want to be able to maintain full control over the direction of your company.
Source – Openforum
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