6 Ways To Find Investors And Raise Millions For Small Business

How to Find Investors for Small Business: Top 6 Ways

It's a thrilling experience to launch a new company. However, raising capital is crucial to the survival of your startup or small business. Despite the importance of securing early-stage funding for a startup, many first-time business owners lack an understanding of where to look. However, you shouldn't assume that you need to rely solely on savings or a traditional bank loan to get your business off the ground. There are many people who could invest. But you have to figure out which ones will put money into your business. 

Investors who gain a return only if the business succeeds, as well as low-interest loans, can relieve some of the financial pressure. Investors should be actively sought after from the get-go. Don't give up the hunt once you've begun it.

Need more effective fundraising strategies? In this article, we will go through the top six ways for startups and small businesses to find investors.

Private Investors: Angel Investor and Venture Capitalists

Angel investors and venture capitalists are the two most common forms of private investment. Commonly, investors will receive equity stakes in the company in exchange for their funding.

Let's examine the distinction between these two categories of investors.

Angel Investor

An angel investor is a wealthy individual who has the method, connections, and expert knowledge to significantly contribute to a startup's growth and prosperity. A single angel investor can fund a business entirely on his own. Angel investors, on the other hand, almost always demand a substantial rate of return. They're also picky about what they put their money into.

Angel investors are private individuals who put up their own money to back startups. When an angel invests, he becomes a shareholder. Companies like Amazon and Apple got their starts when their founders found an audience with angel investors.

These investors put money into you with the hope of getting a high return on investment (ROI). They generally choose to play a bigger role in running your startup by asking for advice on how to run it day-to-day.

So, how do you get an angel investment? Here are some tips:

• You can meet with local investors as much as possible. Attend local startup events, chamber of commerce meetings, and fundraisers.
• There are a number of angel investor networks available on the Internet. The Angel Investment Network is the largest online community of angel investors, with more than 300,000 investors.
• You can talk to successful entrepreneurs in your area. Successful entrepreneurs have money, know how to spot a good business opportunity, and understand what it takes to run a successful business.

Venture Capitalists

When a company is ready to grow, and potentially branch out into riskier territory, venture capitalists are a necessary component of the team. Investors' money is used rather than the venture capitalist's own.

While VCs can be helpful to new businesses, they typically invest in established companies that have a track record of success, a strong management team in place, and a clear path to continued growth. That firm is now planning for transformation but is short on capital. It's possible that the company's newest offering will completely alter the market.

Capital requirements for venture capitalists can be several million dollars, which is significantly more than what angel investors typically put up. In addition, it is anticipated that the ROI will be exceptionally high. Investors from the venture capital industry will have a stake in the company and the same voting rights as angel investors.

If you want to read our article about The Basics of Venture Capital for Your Business, it is waiting for you here.

How do you get venture capital? Here are some tips:

• You can look into the VC firms that have funded similar companies. VC firms that have previously backed your rival are not the ones you want to approach. Examine the venture capitalist industry instead.
• You can reach out to them on LinkedIn. LinkedIn has opened up new avenues for venture capital for startups. Make an effort to network with VCs on the site.
• Show up to pitch events. Connecting with private equity firms is facilitated by pitch events, which are highly beneficial for entrepreneurs. Find out if there are any upcoming local or online pitch events. You should still go if only for the networking possibilities, even if you don't have anything to pitch.

2. Crowdfunding

The term "crowdfunding platform" refers to a website that facilitates the process of raising money for a specific purpose, such as a startup business.

Crowdfunding has the potential to provide the financial backing necessary to bring your product to market or to launch your business, but it also comes with the risk of overwhelming you with orders while you're still getting the hang of things.

It is important to note that the specifics of how crowdfunding functions will vary depending on the platform you use.

Social media platforms like Facebook and LinkedIn, along with crowdfunding websites like Kickstarter, GoFundMe, and Indiegogo, allow entrepreneurs to solicit financial backing from a global audience without giving up control of their businesses.

3. Seek Funding From Family and Friends

This could be the least time-consuming and money-consuming method of funding your business. It's important to discuss the requirements of your company with close friends and relatives. Make a decision as to whether or not you want a loan from them, or whether or not you want investment capital. This situation could be simplified with a loan.

When loved ones put money into your business, they take on some of the rewards and some of the risks. When compared to a loan, an investment may provide a larger sum upfront and does not require monthly repayment. The only way to pay back investors is to make a profit.

Having loved ones as investors can be a double-edged sword because you'll be bringing personal relationships into the business realm.Their funding's biggest benefit is also its biggest risk. It's not well-established. Your friends and family are not professional investors, so they will not assess you like a business angel would. Also, when people invest money into a business and see that money go down the drain, it can put a strain on the relationship between the people involved.

4.Talk to Companies or Schools In Your Field.

Most likely, you already know people who work in the same field as you do. You could talk to them to see if they know anyone who might be interested in putting money into your business.

This research process might take a lot of your time since you probably will not find an investor after just one phone call. In fact, you might need to call a lot of people or even go to events for your industry to network. But if you keep looking, you might find that one person who likes your business plan or product enough to put money into it.

The other option is the schools that offer certificates, diplomas, or degrees in your field. This is because the professors who teach the programs often bring in guest speakers to talk about certain topics. Most of the time, these guests are the best at what they do. Maybe you could ask the professors or someone else in the department to introduce you to these guests on your behalf.

5. Rely on Your Social Media Community

Business owners can benefit from social media. Take the time to build your business's digital footprint on social media, where you can attract investors. Promote your business frequently. Publish and share articles that show your industry knowledge. Respond thoughtfully and positively to others' posts to build your network. Encourage anyone who has used your product or service to post about it online to reach investors.

Once you have established a digital footprint on social media, use it to attract the attention of potential investors. See if you can use your shared connections to secure an introduction. Engage with potential investors' content, and if you deem it appropriate, initiate a relationship with them.

There are numerous ways to acquire funding and investors for your company. If one alternative fails, don't give up! Having a successful business requires tenacity. The only way to achieve success is to never allow financial or other obstacles to deter you from pursuing your objective.

6. Bootstrapping

The term "bootstrapping" refers to the method of funding a company with personal funds. Your personal savings may not be enough to fund the entirety of your business, but they can serve as a solid foundation as you seek out additional investments down the road.

Companies often rely on the founder for initial startup capital because it is challenging for them to raise funds and find business investors during the Idea Stage. While it's true that putting up your own cash is a surefire way to lose it, it also gives you unfettered creative control over your company. When starting out, small businesses have a lot to gain from the bootstrapping strategy.

Investors are more likely to put money into a small business if they believe the owner has something at stake. They want evidence that you have confidence in your business idea to put up some of your own cash. If you don't have faith in the idea yourself, why should anyone else?

To avoid going into debt in the event that your startup fails, it's a good idea to use personal savings to fund the company from the start. However, as the business expands, you may find that you can no longer fund it solely from internal resources and will have to seek investment from others.

Extra Tip: Try Eurokick to Find Investor

Getting funds is easier with Eurokick. The only thing you need to do is to have an innovative business and visit Eurokick's website to apply for funding.

Eurokick is a venture capital company that invests in and consults for high-fidelity, innovative, and globally scalable technology startups.

Eurokick is a company that supports all innovative and forward-thinking projects and monitors your progress. Eurokick's experienced professionals analyze your current situation and then advise about what you can do to grow your small business. 

If that sounds like a fit for your business, get in touch with us!