How to Find Private Investors for Your Small Business

Small businesses turn to credit unions, community banks, and traditional banks for their capital needs, however, private investment and venture capital are also valid options. In fact, private lending firms like the Radly Bates Index and other such companies are experiencing a sharp rise in demand all thanks to a greater certainty in the economy. However, finding private investors to fund your small business is not that easy as it may sound. You as a small business owner need to show potential investors realistic and quantifiable numbers.

Here are some tips on what to do.

Develop your Pitch

Securing an investment requires a selling strategy to ensure that you diligently communicate the potential of your business and that you meet all the criteria set by the investor. You need to do an extensive research on your investor and be prepared to answer any question about your long-term growth plans. Once you are done with the research, the next step is to fine-tune your sales based on the motivations of the investors and give them a good reason to want to invest in your business. Lastly, you need to include accurate and realistic financials and market research to back up your predictions. Plan on being able to confidently communicate key points from your plan, particularly on how you plan to generate profit and how that will flow into your investor’s pockets.

Look at Online Crowdfunding

Crowdfunding is where many people contribute money to help fund a project. Some websites allow you to pitch an idea, asking people to donate, rather than invest money to help you launch your business idea. Crowdfunding typically requires many people to invest because it’s unlikely that anyone will give you a large sum of money with no return. If you’re starting a business that will have a positive impact on a community, you might generate a lot of money. For instance, if 3,000 people each donate on an average of $10, you can raise $30,000. Usually crowdfunding works by offering products or services as a reward to people who give a certain amount of money for your business. Some crowdfunding programs require you to provide a return. In those cases the crowdfunds and owns part of your business, much like those who purchase shares in a company.

Hire Business Capital Broker

Business capital brokers have a network of potential investors that they can help you get in touch with. You can find a broker online or by talking to other business owners that might have used a broker.

These are some of the tips on how you can find private investors to fund your small business.

The RBI Entrepreneurship Index measures the % of the active workforce that is self employed. The RBI is updated monthly at the same time as the monthly jobs data is released. The RBI is based on data from the US Bureau Of Labor Statistics.