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Old January 28, 2008, 04:36 PM
Dien Rice Dien Rice is offline
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Join Date: Aug 2006
Posts: 3,358
Default Re: How to increase a business capital-tips?

Quote:
Originally Posted by Dien Rice View Post
I think your best bet (apart from friends and family) would be to seek out angel investors. There are angel investor networks you could try...

However, make sure you have all your "ducks in a row". How much money do you want, and what are you planning to give in return? Are you giving part-ownership (selling part of your business)? Or are you seeking a loan which you'll repay with interest? Or both?

What assets does your business already have? Who is part of your team - and what is their experience in this area? (If you don't have people with experience in this type of business, then you may want to try to get some, at least in an advisory role, but even better as people who will be involved in the day-to-day running of the business... It will add to your credibility.) Do you have a business plan? Many investors like to see one...

Getting investors is really a form of sales, and you have to hit all the points. What you are selling is part-ownership in your business. Know very clearly what you want (how much money), what you're willing to give in return (what percentage of the business, that is), make it sound exciting, point out the potential profits, bolster up your credibility (a good "team" with experience in the industry, and a solid business plan will help with that last point)... If this business is in a growth industry, make sure you point it out. I'm sure I've missed out some points, but those are some important ones...!
I'll just add that one thing that some investors will ask about is how much money YOU have invested in the business, or how much do your friends/family have invested in it?

If you don't believe enough in the business to invest your own money, or to encourage your family/friends to invest in it, they may see it as a sign that you don't really have confidence in your business at all, and they may stay out for that reason... Anyway, keep that in mind...

- Dien
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