Startup investor – search for a business partner in 4 steps
If you have a business idea but no money, you need an investor for a startup. But where to look for it and how to convince that your business is the most profitable and safest?
Investor for a startup: where is found and what attracts him
If you have a useful business idea, then you urgently need an investor to launch your startup. But even if you find him, how to clearly explain to him that your company is a profitable investment? This article is for those who think well, but sell poorly.
A startup investor loves favorable conditions
To interest a potential investor, think like him. Imagine that you have “extra" money. Will you take it to the bank and open a deposit there? This is unlikely. After all, this solution does not cover the inflation rate, which means it is not reasonable. If you were an investor, to what level of income would you aspire?
Probably, at least, you would like to live comfortably and work as little as possible. In this case, you need to secure a source of regular passive income. This source cannot be "foreign".
Businessmen willingly invest in ideas and projects if they understand their benefits and share the values that founders and developers of startups carry.
Therefore, when you are looking for an investor, do not take him as a lender. With such success, you can take a loan from a bank or a special organization. But this is a different type of financial relationship.
Your startup at the time of the cash injection is an idea that grows and forms in your mind. For it to materialize, it is necessary to create conditions for this. In the conditions of interaction with the lender, it is unlikely that you will be pleased to develop and report on the funds spent. A partner is a person. The lender is part of the system. Do not forget.
The business you are planning to develop should be profitable for both parties.
Step-by-step guide for beginner businessmen:
If you need an adequate business partner, provide him with as much truthful information as possible:
- How unique is your product or service and will it be in demand;
- Clearly determine the starting amount and make a detailed estimate. The investor must understand that you can count. Least.
- Timing is a rather relative point. But if you coped with the estimate, then you should already understand in general terms when you will recoup the investment.
- The investor must understand their benefits – describe the level of profit that you want to reach under a successful set of circumstances.
- Partnership in business is built on having a competent accountant in the team, a successful lawyer and your ability to admit your mistakes. If your startup does not pay off, you must guarantee a return on investment and back up your promise with a notary public.
Make a business plan. The first thing your potential partner will pay attention to is your planning skills and paperwork of these plans. Structure your entries:
- Describe the project;
- Calculate financial expenses;
- Provide a clear analysis of the financial benefits that an investor will receive if they decide to cooperate with you. Do not “sculpt” incomprehensible graphics and canvases of official texts. If you spend all your efforts on throwing dust in your eyes, it will be felt and the person will not trust you with their money;
- Determine the timing of the first income and indicate how long it will take you to recoup the funds entrusted to you;
- Specify development prospects. At the same time, focus on finances and stability. As a rule, investors are willing to invest if it is passive income. If you offer something innovative, the investor doesn’t care. Of course, if this is not a government agency that urgently needs to master the budget.
Startup investor loves the little things
Show a potential partner that you are disciplined, courteous and reliable. Your appearance, manner of speaking, inner feeling, paperwork (from paper quality to folder and spelling) – all this affects the decision of the investor, and, ultimately, the implementation of your idea.
To try on the "investor’s jacket" – read our article about investing “A profitable investment”