Expanding a newly established business takes a lot of money. For those entrepreneurs whose business assets are primarily intangible, getting a conventional loan from a traditional financial institution or from an angel investor may not be appropriate. They need venture capital funding instead, and should consider the advice of experts.
First of all, they say entrepreneurs have to understand the difference between venture capital investors and angel investors. Angel investors are individuals or firms that fund new businesses in the form of loans or equity in the company. Friends and family often become angels for entrepreneurs. Rapidly growing businesses in need of additional funds to expand often approach investors willing to on take high risk projects, usually in exchange for a certain percentage of equity in the company.
These individuals and firms operate at the highest levels. It won't be easy to convince them that the value you place on your company is realistic or that the company will continue to grow at impressive rates. You will have to do plenty of research to find the firms that invest money in the type of business you run and are willing to offer you the kind of sums you need for expansion.
Bogus companies are always looking for easy revenue sources. Once you started your research, you probably noticed any number of companies offering unique databases and solid leads designed to make your search for an investor easy and quick. Experts say you shouldn't be fooled.
You can't mass email investors either. They have seen all too many of these kinds of pitches and don't even open them. Not only will you have wasted your time creating an ineffective marketing tool, you might end up losing a potential investor who you could have interested if you had approached him differently. The best idea is to target the best matches for your situation and go after those.
Once you have narrowed the field, you have to make a plan to approach them. Finding out as much as possible about them will help. You may know someone who is in the same alumni association for instance. You should contact anyone who worked closely with the investor on a similar project. You could even attend an event where the investor is speaking and try to introduce yourself once the event is concluded.
You will have to be smart to get the attention of one of these investors. They are inundated with requests, and only respond to a few. You need a great tag line that describes your company in a few words and a summary video good enough to get you through the door to make a pitch.
Great businesses, that start fast and grow quickly, fall by the wayside every day because the entrepreneur didn't get expansion plans in front of the right investors at the right time. It is not enough to have big ideas, you have to know how to turn them into reality.
First of all, they say entrepreneurs have to understand the difference between venture capital investors and angel investors. Angel investors are individuals or firms that fund new businesses in the form of loans or equity in the company. Friends and family often become angels for entrepreneurs. Rapidly growing businesses in need of additional funds to expand often approach investors willing to on take high risk projects, usually in exchange for a certain percentage of equity in the company.
These individuals and firms operate at the highest levels. It won't be easy to convince them that the value you place on your company is realistic or that the company will continue to grow at impressive rates. You will have to do plenty of research to find the firms that invest money in the type of business you run and are willing to offer you the kind of sums you need for expansion.
Bogus companies are always looking for easy revenue sources. Once you started your research, you probably noticed any number of companies offering unique databases and solid leads designed to make your search for an investor easy and quick. Experts say you shouldn't be fooled.
You can't mass email investors either. They have seen all too many of these kinds of pitches and don't even open them. Not only will you have wasted your time creating an ineffective marketing tool, you might end up losing a potential investor who you could have interested if you had approached him differently. The best idea is to target the best matches for your situation and go after those.
Once you have narrowed the field, you have to make a plan to approach them. Finding out as much as possible about them will help. You may know someone who is in the same alumni association for instance. You should contact anyone who worked closely with the investor on a similar project. You could even attend an event where the investor is speaking and try to introduce yourself once the event is concluded.
You will have to be smart to get the attention of one of these investors. They are inundated with requests, and only respond to a few. You need a great tag line that describes your company in a few words and a summary video good enough to get you through the door to make a pitch.
Great businesses, that start fast and grow quickly, fall by the wayside every day because the entrepreneur didn't get expansion plans in front of the right investors at the right time. It is not enough to have big ideas, you have to know how to turn them into reality.
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