Where to find investors and how? Where to find an investor for a small business, for a startup, for a project?

2024 Author: Howard Calhoun | [email protected]. Last modified: 2023-12-17 10:16

Starting a business in many cases requires significant investments. Appropriate capital can play a decisive role in bringing a startup to a promising market in a timely manner, improving its recognition in the segment, expanding its geography, and modernizing production. Where can you really find an investor? How to build a trusting relationship with him?

For what purpose are they looking for an investor?

Before asking the question of where to find investors, it is necessary to decide on the purpose for which the search for partners should be carried out. As a rule, this task is solved by the owner of a commercial enterprise. He needs the investor's assistance due to the presence of an insufficient amount of money at his personal disposal in order to fully implement the business project. An investor may also be interested in providing the necessary amount of financing in order to subsequently benefit from the growth of the company's turnover.

What are the mechanisms for building investor relationships?

Also,Before thinking about where to find investors, an entrepreneur needs to decide on the desired mechanisms for building relationships with a partner. There may be several.

Firstly, an entrepreneur's relationship with a partner who is willing to provide financing can constitute direct investment. This mechanism involves the provision of funds to the company in exchange for the participation of a partner in the direct management of the organization, in determining the business development strategy.

Secondly, financing can be attracted on the terms of portfolio investment. This mechanism assumes that the partner, while investing in business development, also acquires a share in the ownership of the company. In the first case, the investor's benefit is to participate in the management of a potentially large enterprise and become an influential member of the business community. In the second, the partner, in case of company growth, gets the opportunity to significantly increase his capital.

Types of investors

Another nuance that an entrepreneur needs to study before deciding where to find investors is to consider the specifics of the activities of partners who are ready to invest in other businesses. The subjects that become participants in the relevant legal relations can be represented by: individuals, organizations. Both, in turn, are classified into venture investors and those who are ready to invest in fundamental projects. Investors can also be Russian and foreign.

Another criterion for classifying entities involved in legal relations with businesses on financing issues is the degree of state participation. There are government agencies - most often funds that assist businesses in raising funds or providing them. There are completely private companies.

Crowdfunding

There is a special category of legal relations in the field of investment - crowdfunding. This term corresponds to the mechanism of attracting business funds from a large number of people - individual social groups or representing society as a whole. As a rule, investors who provide funds to entrepreneurs as part of crowdfunding do not impose any obligations on them in terms of exchange for a share in the business or participation in the management of the company. This feature predetermines the great popularity of the relevant legal relations. Many entrepreneurs, thinking about where to find investors, first of all turn to crowdfunding.

What might interest an investor?

Now let's consider a number of practical nuances that characterize the relationship between entrepreneurs and partners in terms of business financing. So, before thinking about where to find an investor for a project, you should pay attention to such an aspect as the attractiveness of a business project - those indicators that a potential partner will pay attention to when making a decision on investing money in a company. Which ones?

First of all, this is the presence of a sufficiently large market for the sale of goods and services that the company produces. The second indicator is the dynamics of the industry development. The investor is interested in the product produced by the company being in demand on the market for a long time. If the dynamics of development of the industry in which the enterprise operates is sufficiently high, then the partner must make sure that the entrepreneur can ensure the timely release of goods that is not inferior to the products of competing enterprises.

Actually, the level of competition is also an important indicator for an investor. At the same time, for some partners, high may be more preferable, while for others, low. In the first case, the investor and the entrepreneur can take advantage of the presence of a sufficiently stable demand for the manufactured product and counteract competitors due to the higher quality or lower price of the products supplied to the market. Low competition is attractive from the point of view of the firm's profitability. Of course, provided that there is a demand for goods manufactured by the company.

Another important criterion for an investor to make a positive decision regarding project financing is the validity of the business plan. The market may be in the most favorable conditions, there may be an optimal level of demand and competition, but if the entrepreneur does not provide a plan according to which the firm will enjoy these advantages, the investor may questionprospects for financing the company.

The next factor in making a positive decision on a project by a partner is the competence of the team with which the business owner works. Or his personal. The situation on the market may be optimal, the business plan worked out in detail, but the implementation will not be at the highest level for the reason that it will be carried out by unprepared people.

These are the main factors that an entrepreneur should consider before thinking about where to find an investor for a project. If he successfully solved this problem, you can proceed to consider specific mechanisms for finding a partner. Where to find an investor for a start-up of a medium or large enterprise in Russia?

How to find an investor for a startup?

Let's start with the specifics of finding partners for a startup founder. The main value of the corresponding type of business is a promising idea. As a rule, it is characterized by originality, dissimilarity with most other concepts. Another significant criterion for evaluating the prospects of a startup is the absence of existing businesses in the relevant segment across the country or a particular region.

It happens that an entrepreneur who solves the problem of where to find an investor in Moscow decides to switch to one of the markets in the constituent entities of the Russian Federation, since competitors can already operate in the Russian capital. While in the regions, similar businesses will not be too developed or will be completely absent as business entities.

Abovewe examined the main mechanisms for attracting investment. If the question is where to find an investor for a startup, then the optimal schemes in this case will be: attracting venture capital investments, crowdfunding. The advantage of both mechanisms is the absence of big risks for the entrepreneur. True, in the case of venture projects, the business owner in most cases has to give a share in the ownership of the company - the type of financing in question belongs to the category of portfolio investments. However, the partner in this case, as a rule, assumes the bulk of the costs necessary for the implementation of the project. The advantages of crowdfunding are also obvious - it is an opportunity to raise a large amount of funds in the absence of obligations to investors in most cases.

Where can I find an investor who is ready to invest in a startup under this or that scheme?

If we talk about venture projects, then there are a large number of specialized funds that are actively involved in the relevant legal relations. They exist both in the Russian Federation and abroad, and are represented by both state and private structures. Sometimes it is enough just to find a suitable venture project or venture fund, and then get acquainted with the proposals of the relevant companies regarding the prospects for partnership with private organizations.

How to find investors and where to look for them when it comes to crowdfunding? This format of legal relations is almost completely online. There are a number of the largest - both Russian and foreign - crowdfunding platforms. Use themquite simple, but it is important to write a competent description of a business project, to tell potential investors about its benefits.

How to find an investor for a small business?

Now consider where to find an investor for a small business. This format of the enterprise activity assumes that the company is not a start-up, but an already functioning business with more or less acceptable turnover. Investments in this case are sought in order to expand or modernize production, conduct a large-scale marketing campaign in order to increase brand awareness in the region, country or abroad. Typically, small businesses are funded by investors who specialize in building fundamental partnerships with private firms.

Venture investments allow for a scenario in which the partner, in principle, will not be able to return his own investments, since the business will be unprofitable. In turn, the fundamental partnership assumes that the investor will be able to at least ensure zero profitability of his investments, and in the long term - to significantly increase capital due to the growth of the enterprise.

Where to find an investor for a small business? Such tasks, as a rule, are solved during personal meetings between entrepreneurs and potential partners who are ready to invest in the development of the company. They can be held as part of specialized events - business conferences, round tables, presentations. It is not excluded communication between the entrepreneur and the investor and ininformal setting, such as at a corporate party to which they were invited. Fundamental investing is a common activity among financial funds. Information about them can also be found in search engines.

How to find an investor for a medium or large enterprise?

Where can I find an investor for a medium or large business? It is noteworthy that a large-scale established company, at least classified as a medium-sized business, as a rule, is in itself a desirable investment object for an experienced financier, since it is an operating profitable business. Therefore, it is possible that it may not be necessary to look for a partner who is ready to invest in a company if it meets the criteria for a large enterprise.

However, another question may well be relevant - where to find a private investor who would be a reliable partner, ready to build a constructive dialogue on business development. It is allowed, as a rule, in non-public ways - through communication with major financiers through private channels. But in some cases it is realistic to find an investor at major events, especially when it comes to, for example, international exhibitions. The prospects for building relationships with partners largely depend on the business area.

Thus, the solution to the question "where to find an investor for construction" may differ significantly from such a task as finding a partner in the field of information technology. Construction business and IT- areas with different profitability and dynamics of development. Each of them requires special investor competencies in assessing the prospects for investing in a particular company. But, of course, there are financiers who are equally well versed in both construction and information technology. Thus, the investment search strategy largely depends on the size of the firm, as well as on the sector of the economy in which the company is present. For start-ups, one approach will be more justified, and for small businesses, medium and large firms, other strategies.

It will also be useful to consider a number of recommendations for entrepreneurs who decide to find an investor, as well as establish a trusting relationship with him. We will study those strategies that can be described as universal, sufficiently suitable for a business of any size - a start-up, small, medium or large enterprise.

How to find an investor and establish a relationship with him: recommendations

Actually, it is useful to search for an investor in those social environments in which people engaged in activities close to the company's profile communicate. Where finding a private investor for construction is not a problem, it can be quite difficult to establish an interaction with a person who might be interested in sales. Effective investing is largely the result of high competence, most often achieved within the narrow specialization of a financier.

Investment experts advise business owners to firstturn to tell potential partners about what other sources of funding are supposed to be used, and what their actual availability is. This approach will allow the investor to understand his own role in the relationship with the business and assess his readiness to comply with it. So, if the company also uses credit funds, then its owner can make it clear to the partner that he can count on a smaller share in the business than if the investor financed the project alone.

Another important nuance is the discussion of the conditions for changing the initially reached agreements. As the project progresses, it may turn out that the project will show more or less profitability (or return on investment) than expected by the business owner or investor, as a result of which it may be preferable for them to change the way they participate in the company's activities.

An entrepreneur should discuss with a partner the procedure for reporting on certain business transactions, its composition. Some investors require only the appropriate type of accounting documentation, while others prefer to receive management reports as well. It is useful to clarify these nuances at the earliest stages of the partnership.

It is therefore important not only where to find a business investor, but also how to establish a long-term partnership with him. A high level of competence in entrepreneurship is always appreciated. Therefore, the investor will also be interested in building an effective partnership. You need to be able to listen to him and take into account what he expresses.interests.

CV

So we've covered the question of where to find a real private investor. Its successful resolution depends on the scope of the company, its scale, the level of competence of the entrepreneur and the specialists he attracts. An important role is played by other conditions for financing the company, as well as the willingness of its owner, if necessary, to revise the agreements reached with the investor in order to build long-term partnerships.