4 Practical Ways To Secure Investors For Your New Business

Wednesday 26th May, 2021

Building a business from the ground up requires adequate planning and funding to facilitate various organization’s operations. Besides, introducing new projects in a new business tend to cost even more and likely to take longer than anticipated to generate profits. Although a business plan is critical, most start-ups find it hard to raise capital to grow and expand.

Fortunately, emerging companies have multiple options to secure business capital and scale up to achieve their goals. Among unambiguous ways to raise capital for any new business is bringing in investors. However, finding the right investors can be gruelling and challenging for start-ups.

WHY SECURE INVESTORS FOR YOUR NEW BUSINESS

Generally, investor funding is ideal for getting capital to fund lagging processes within your new business. Even when you have a sturdy business plan, investors play a critical role to bring your business ideas to life. So, why should you secure an investor for your new business? Here are key reasons to get investors on board;

• Access to growth capital: Unlike business loans, investors allow new businesses to access capital without a scheduled repayment but through investment benefits.
• Expertise: Primarily, investors have extensive experience to run a company; therefore, bringing a specialized investor into your new company helps you gain more insights on how to become more productive.
• No credit history required: Most business loan lenders have stringent financial and credit history requirements before granting new business the much-needed capital. Investors solely focus on your business’s future and how much profit it is likely to generate.

HOW TO SECURE INVESTORS FOR YOUR START-UP

Securing investors is a critical aspect for any new business looking to avoid financial obstacles. The intent is to have adequate capital to grow and expand, especially entrepreneurs with bad credits. That said, here are effective ways to secure investors for your new business.

OFFER RETURN ON INVESTMENTS

Investors may believe in your business and ultimately consider investing in it. However, they need to generate profit from their investment. To bring them on board, highlight what they will gain once they put their money into your start-up — more specifically, illustrate how and when you will facilitate their returns. This step will increase your chances of securing an apt investor for your new-found business.

SHOW BUSINESS RESULTS

First-time entrepreneurs find it hard to prove their business ideas actually work to attract investors. Yet, investors need proof that their investment is profitable both to the company and for personal gains. Therefore, it is important to make an effort and acquire customers or users before approaching potential investors. This helps you tell a story about your business potential backed with promising figures.

FOCUS ON NETWORKING

Networking is one of the most effective ways for new entrepreneurs to secure investors for their new businesses. It enables you to pitch your start-up in a more organic, but less formal manner and meet more investors. In addition, networking is an excellent way to sell your business within the start-up and investing community. In most cases, you will get the right investors, smart enough to help you grow and expand your new business through networking.

HAVE A REALISTIC BUDGET

Budgeting begins from the time you establish the business and get your first customer. The same applies when securing investors because it gives them a better understanding of the funding your start-up needs. Always consider factors such as annual revenue and expenses to present a realistic budget, reasonable enough to investors.

BOTTOM LINE

Investors prefer putting their money in companies with proven traction and a rational customer base. As such, you need to make smart decisions when looking to secure the right investors to help scale up your new business. Showcasing your business’s potential to thrive is an excellent way to connect investors to your business.

At Betterbanc, we understand financial hurdles new businesses face when trying to scale up and outweigh the competition. Henceforth, we remain committed to provide capital to start-ups and help them grow and expand. For more information, contact us to learn more today!