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How to find investors for your business

Investors offer finance in return for an equity share of a business and will often play a hands-on role in the development of a company too. But how to find investors for a business? We share our tips to help find, and secure, that all-important funding for your trade business.

Investors are one of the many options available to help finance a small business or support a business expansion strategy for your company. But knowing where to start can feel bewildering if you’re not familiar with this type of financing.

In this post, we’ll explain how to find investors for a business, how to create a pitch deck for investors, and, crucially, what investors look for when deciding whether your business would be a good fit for their portfolio.

Our focus is on angel investors, rather than venture capital firms, which usually involve big businesses investing vast sums of money, as opposed to individuals.

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How to get investors for your business

It’s worth remembering that while the primary reason for working with investors is for financing, an investor usually has much more to offer.

Investors are typically entrepreneurs with a huge amount of business experience. They’ll want to share their time, expertise, connections, and business knowledge with you to help the success of your business (their investment!).

Therefore when looking at how to find private investors, do your homework to select investors with experience in your industry.

How to find business investors

Not sure how to find investors for your business? There are plenty of places to start looking.

  • Talk to your peers: ask within your personal and professional network. Ask peers in similar fields to yours if any of them have investors already, or any tips on how to find business investors.
  • Attend industry events: Attending events for your industry, or for local professionals in your area, can be a great place to start putting out feelers for investors.
  • Make connections on LinkedIn: It can be hard to find investors with an online search, which is why LinkedIn can be a better bet. It allows you to find and make relevant, local connections using your network more organically.
  • Schools, colleges and universities: If there are courses available relating to your field, they might invite experts and investors in the field to speak. This can be a great place to start looking for a potential investor. Keep an eye on the speaking schedule or speak to professors and lecturers in the department.

How do you get investors for a small business

To get investors for a small business, follow the guidance above, but also speak with other businesses that have worked with investors.

Small businesses will often have a story attached to them – why and how you set up your business and what pain points you’re aiming to solve for your customers.

When approaching investors, don’t be afraid to share your story, your passion, and your ambitions for your business, and ask for advice or guidance.

Building an initial rapport is a great way to start the journey toward seeking financial investment.

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How to find investors for a construction business

A great way to find investors for a construction business is to use the Angel Investment Network. Search for specific keywords, such as ‘construction’, to view a list of investors with experience in this particular field.

Before entering into any investment agreement, make sure you read up on these important regulations:

  • Enterprise Investment Scheme (EIS) and Seed Enterprise Investment Scheme (SEIS)
  • Financial Services and Markets Act 2000 (FSMA)

Business planning

How to create a pitch deck for investors

When dealing with a potential investor, always remain professional and be confident when delivering your pitch. But remember, an investor wants to know they can work alongside you. Your working relationship could be between three to eight years, so it’s important to build a rapport too.

The bottom line is clearly important to investors, so make sure you have hard evidence to hand. However, the figures won’t drive your business success, your passion, commitment, and hard work will, so communicate this in your pitch.

Be honest, transparent, and clear in the information you provide both in terms of the financial position of the company, what level of investment you need, how it’ll be used, and how it’ll meet your business objectives. Include:

  • A compelling story about your business: why you do what you do and what makes your business unique
  • Your business model: Information about your product/service, your team, the market your business is in, the opportunity you’ve identified, how it’ll scale (grow), your business model, and your revenue
  • Your expectations: what you need from an investor and what their exit strategy looks like

What do potential investors look for in a business?

Potential investors will be looking for a number of things when considering whether your business is right for their portfolio.

First of all, it helps if your business is in a market that they have some knowledge of.

Secondly, they’ll look to see if you (and your leadership team, if you have one), are a powerful unit.

They’ll also want to make sure that an investment in your business would offer them sufficient diversity. No one wants all their eggs in one basket.

Typically, angel investors will be looking for:

  • Businesses in their early stages, with an annual turnover of less than £5m, demonstrating growth, or clear plans to grow
  • Businesses in need of investment between £15,000 – £500,000 in exchange for a share of the business. This is usually for around five years

What do investors look for in financial statements?

From a financial point of view, an investor will want to see that your business has promising financial projections and that it’s scalable. This means that your business has a structure and a strategy that will facilitate greater profitability and efficiency as you take on more work.

If you’ve seen the BBC’s Dragon’s Den you’ll know what happens when the investors ask the business owner about the finances and they don’t have clear answers. Yep. They’re normally sent packing. Before approaching an investor make sure you know:

  • Your turnover
  • Your profit
  • Your sales figures
  • Your growth targets
  • Plus forecasts!

You’ll also need to be specific about how much investment your business needs, exactly how the investment will be used, and how it will benefit your business.

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What investors look for before investing

Before you start looking for investors, make sure you’ve got a comprehensive and sensible business plan. Our guide on how to write a business plan is a great place to start if this isn’t something you’ve ever put down on paper.

Another area that investors look for before investing is your marketing plan. After all, an ambitious business with detailed plans for achieving its targets is more likely to offer a good return on investment than one that’s drifting aimlessly.

A good marketing plan will position the customer and potential new customers at its heart, outlining how your business can meet and exceed their needs.

How to get investors for a business idea

If you have the seed of an idea, as opposed to a business that’s already up and running, a good first port of call for investment is often friends and family, or crowdfunding. Crowdfunding is raising funds from the public in exchange for unlisted shares (equity) in your business.

For help getting your business idea off the ground, sign up for our ‘Become the boss’ emails. Just enter your details below.

FAQs

How do I find private investors near me?

To find a private investor near you, try searching on the UK Business Angels Association (UKBAA) member directory for matches.

How do I get someone to invest in my business idea?

If you’re looking for investment in a business idea, consider approaching friends and family, or starting a crowdfunding campaign.

What attracts investors to invest in a company?

Investors want to know they’ll make a return on their investment, but they’ll want to see your passion and commitment too. Attract investors with a compelling story about your business, accurate and clear financials, the growth potential, and the exit plan.

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