How To Attract Investors to Fund Your Business

Having an investor, especially in the early stages of a business, can be remarkably advantageous. Firstly, the investor will likely fund your ventures, so you don't have to worry about most of your financial issues. Secondly, an investor can be a valuable business partner, offering useful advice, guidance and insights. Some investors help companies realize and utilize more business opportunities. This is what Mark Stevens has done for most of the companies he’s invested in over the years.

Many businesses attract investors with the sole goal of funding their enterprises. According to Business Insider, 82% of small businesses fail as a result of cash flow problems. Consistent funding from an investor might keep your business from being part of this shocking statistics but the truth is, you’ll probably end up with more than just a source of funds once you partner with a committed investor. Here are a few tips on how to attract investors to get the funding you need. 

Show Commitment & Passion

If you’re trying to get people interested in your company, you should show them you’re fully committed to the business.  You need to demonstrate a high level of interest and enthusiasm in what you're doing to get people excited about your idea.

First off, learn everything there is to know about your business and the industry as a whole. In-depth knowledge of your niche often indicates authority and interest in the venture. This can turn out well if your business is built around a concept or idea that you are particularly passionate about. Remember that in business, passion and enthusiasm are key and can in fact, be contagious.  

Don’t Cover Up Past Failures

Many entrepreneurs make the mistake of hiding their past business failures. What these entrepreneurs don't realize is that failure is part of business, and does not always point to incompetence. Business failures are often an opportunity to learn from mistakes and gain valuable experience.

Many investors consider both failure and success as experience. Failing to disclose your past misses can exclude a big part of your business history. Plus, investors might lose trust in you should they find out that you held back vital information from them. While embracing your failures is one step in the right direction, you must also be able to show what you learned and how you hope to prevent such misfortune in the future.

Target the Right Investors

There are plenty of investors out there, all aching to be part of a profitable venture. Even so, not every investor might be right for your business. You have to target investors carefully so as not to waste time pitching to investors who are unlikely to consider or add value to your business.

One of the best ways to target investors is to select those with a keen interest in your industry. For instance, if your business is in the tech industry, talk to investors with a rich history in tech-related companies and ventures. Otherwise, investors in a different niche may fail to recognize or see the value of your business and their input.

You want a like-minded investor who can easily relate to your ideas and share your company's goals and vision. Remember, investors can be more than just a source of funds. Choosing an investor may be just as important as choosing a long-term business partner.

Refine Your Pitch

How you pitch your company and ideas can heavily influence the likelihood of scoring an investor. The first impression is everything when it comes to selling new ideas, especially to business leaders who are not easily convinced.

Make your pitch as persuasive as possible. Enrich it with accurate and attractive figures from market analysis, sales projections and existing sales and profits. It might also help to showcase your credentials as an entrepreneur and professional, if you have any. Speak of your company’s accreditation and endorsements. The goal of your pitch should be to share your business vision and show that you have the skills and backing to realize those goals.

It also helps if you don’t generalize your pitching strategy. Personalize each pitch for different investors. Some investors like to see things from a different perspective, so find a unique way of approaching and convincing each investor.

Be Flexible

Some investors may demand things like equity, loyalty and shares from your company in exchange for their funding and involvement. So, you need to be flexible enough to accommodate such demands in your offering. Don't set your mind rigidly on a particular investor-reward system; you may have to give up more than you were expecting. Stay open to new ideas and accept that you may have to make some sacrifices to bag worthwhile investors. Keep in mind that you don’t necessarily have to settle for an arrangement you don’t like; try different investors before settling for an unfavourable deal.

Attracting and choosing an investor is a critical stage for any company that decides to go down this path. It's essential to learn why you need an investor and the kind of investor your business needs to figure out how to attract the right ones.