Entrepreneurs wishing to start up and develop their own business are often faced with the problem of insufficient financial resources. The venture can be very expensive, especially in the first stages, when the financial input significantly exceeds the profits from the activity. A way to solve this problem may be to find an investor.
Very many entrepreneurs would like to find an investor for their company. This is primarily determined by the high start-up and maintenance costs. The desire to raise additional funds is also linked to the desire to develop one's own business.
Business owners have the opportunity to take advantage of investor assistance both at the start of their business and when their business has reached a further stage of development. They can use the money raised, for example, to modernise their existing company.
Private Equity Funds a Venture Capital
The search for funding to grow your business should start by looking at the different types of investors. Private Equity and Venture Capital funds are the most popular. What distinguishes them is that they fund companies at different stages of development.
Venture Capital is a form of funding for innovative projects with a high risk of failure. These funds are therefore intended for companies just starting out on the market. In the case of Private Equity, we are dealing with the financing of stable companies that have already built their position on the market and are now looking for funds for modernisation or development.
When to look for an investor?
A great many entrepreneurs wonder when and whether it is worth seeking an investor for their company at all. There is no clear answer to these questions. However, it must be emphasised that if a company has sufficient funds of its own to enable its continued development, there will be no need to seek an investor.
Its assistance should be used by companies that:
- do not have the financial means to start a business,
- have a ready-made business plan and business concept, but no start-up money,
- are working on a major project that cannot be fully funded from their own resources,
- operate in an industry where there is a lot of competition,
- want to become market leaders,
- have an MVP that has not caught on in the market,
- do not have the resources to further develop the company,
- need to raise money for modernisation.
An entrepreneur who decides to find an investor for a company must be aware that the search can be lengthy. Usually, a given concept or project is presented to a large number of investors before one of them decides to finance it. The whole process therefore involves waiting patiently and presenting your idea properly.
How to become attractive to investors?
Before an investor decides to financially support a particular company, he or she will certainly take a close look at the company's concept and, in the case of existing companies, its previous activities. The most attractive companies for investors are those that:
- are growing faster than their competitors,
- are geared towards a market with high growth potential,
- want to have a significant market share ,
- stand out from the competition (e.g. with an original product),
- have a technological advantage,
- have qualified management.
A very important element is also the presentation of the company itself to the investor. To this end, careful preparation is needed to present one's own concept and show its potential so that the investor is willing to start working with the entrepreneur.
The presentation should be based on concrete and reliable information. First and foremost, it should include financials - the amount of funding needed and what it will be used for, as well as information on anticipated profits. Existing companies should present to the investor the results of their past activities.
In the case of start-ups, the outline of the product on offer should be well prepared so as to present it to the investor with as much detail as possible. The presentation should also not omit information about the team and its competences. It is also worth mentioning the goals that have been achieved so far (e.g. generating interest in the media, raising some funds or building a base of potential customers).
Where to look for an investor?
When looking for an investor, look primarily at investment funds (e.g. IdeaLab Ventures). Very often, entrepreneurs also make use of business angel networks. An investor can also be sought in the immediate environment, among local co-founders (including family or friends of investors).
The use of the Internet is also becoming an increasingly popular method of investor search. To this end, it is worth paying attention to:
- web portals that integrate startups and investors (e.g. startinvest.pl),
- serwisy crowdfundingowe,
- social media (e.g. Facebook groups),
- services and industry blogs for entrepreneurs,
- conferences, grants, competitions organised.
