When trying to secure funding as a new business entrepreneur or a seasoned entrepreneur, it’s important to know what to look for in an investor to determine if they are the right fit for your enterprise.
When a start up is launching, funding is often the main focus because that seed money is the one thing that can help them turn a great idea into a prosperous business. Whatever stage the company, every business entrepreneur can at times be too focused on the money and not on the person investing in it.
Business investors often provide more than just financial support; they often become mentors and help make key introductions that help facilitate business growth and expansion. Therefore, choosing the right business investment option is one of the critical decisions a business entrepreneur can make.
There are many types of business investors, and they take many forms:
- Angel Investors
- Crowd Funding
- Insider Finance
- Growth Funding
- Incubators and Accelerators
- Venture Captial
As a successful entrepreneur and investor, James Sanders has a unique insight into what to consider when choosing a business investor…
Does the Investor Believe in You?
Being a business entrepreneur can be lonely if you don’t surround yourself with the right people. To consider working with an investor, they must be able to convey to you how much they believe in you and your vision. The investor should be able to provide constructive advice but equally enable you to drive the agenda. If an investor ‘gets it’ and they have the credentials to back them up, they would be the better choice over an investor that just looks good on paper. You need trust to succeed; if they believe in you and trust them to support where required, it will probably be a good match.
Do They Provide a Network?
This is especially important if you are a startup business. Who you choose to invest in your business should be well connected and ideally introduce you to their network of contacts. The better start you get off to, the better their chances of recouping their investment or profit share. The right investor will be one that can help you drive your business forward.
Do They Have Experience in Your Industry?
A standout investor will immerse themselves in their specific field and therefore impart that knowledge and wisdom onto the investee.
The ideal investor for your business would have experience in or a connection to your industry. If they have detailed knowledge of your specific sector, they will know the best practice and apply it in your model.
Do They Share Your Business Culture?
Culture is the backbone of a business. As a business entrepreneur trying to get a start or get ahead, having an investor who fits with the culture and ethos of the company is ideal. This is especially important if your investor will have a major say in your business and potentially be on the board. If their vision, ethos and character fit cohesively with yours, they’re likely to be a good addition.
Do They Have The Capacity To Meet Your Needs?
Depending on your business setup, you may be looking for a business investor to work with you in a more in-depth capacity. Do they have that capacity to work with you and provide the level of attention you and your business require? Do they have a large portfolio? Do they have enough time to dedicate to your project? Are they reachable when you need their time? Do they have a team you can contact in their absence?
When considering an investment of any sort for your business, you must ask the hard questions and carry out due diligence. This will help ensure the investor you choose for your business is the one it really needs and the one that can help you grow and thrive. Securing investment for a company doesn’t just have to be financial and nor should it especially if you are a startup. An investment in you, your culture, brand, ethos, industry and vision will all help ensure your business is a successful one.