Skip to content

Where to find investors for your business

It can be hard to know where to find investors for your business, and you can spend lots of time going round and round on the internet. Save yourself that hassle and give this article a read instead.

You will learn

  • How to pitch to investors
  • What options for investment are available
  • Where can you go to find out more

Once you've decided that you would benefit from some external investment for your business, your next steps are to find the right source of finance. we're going to show you where to find investors that might be that right fit for your business.

The first thing to mention is that, as well as a good business plan, you’ll need oodles of determination and resilience; many successful business owners have had numerous rejections but kept knocking on doors and eventually obtained the investment they required. The first question to ask though is where are the doors you need to knock on? Here are the main ones:

Angel Networks

Business Angels are basically private individuals who will either invest individually in your business or jointly with others in a syndicate.

There are many national or regional Angel Networks where investors listen to pitches from business owners (a bit like Dragons Den but with less drama and confrontation!). A good place to start is the UK Business Angel Association.

You can learn more about what business angels are here, or check out our tips for attracting them to your business here.

Crowdfunding

Crowdfunding is a concept whereby individuals collectively pool their resources, typically via the Internet, to raise capital for businesses.

collection of crowdfunding site logos to show people where to find investors for their business
There are many excellent crowdfunding sites, many of which have their own specialisms e.g. start-up/seed capital or growth funding. Check out our article on the types of crowdfunding to find out more.

Private Equity/Venture Capital

These are typically specialist investment companies looking for high growth within a period of three to five years. Private equity firms tend to invest larger amounts than business angels which can run into multi millions depending on their fund size and individual objectives.

Professional Help

The funding market can be a confusing place and there are great merits in taking professional assistance from professional advisors brokers or some firms of accountants which are able to introduce you to appropriate investors.

This won’t be a free service and may appear to be a cost you could do without, but if it gets you the investment you need it can be money very well spent.

Friends & Family

You may be surprised who has surplus cash to invest and has confidence in you, and wishes to back your idea. Hopefully you know someone wants to help you succeed whilst benefiting themselves too by making the investment.

Ensure they understand it’s a relatively high risk investment and, if you obtain the funding, ensure everything is set up correctly and legally for the protection of all parties. If they decline your offer, accept their decision graciously - don’t risk losing friends or falling out with your family members.

woman-using-a-calculator-to-work-out-what-funding-she-needs-to-find-from-investors
Others

There are numerous online professional networking sites which can help you connect with a wide range of investors. Start-up Launch Platforms are another useful online service which can locate investors.

Working with a business incubator can help put in touch with the right people. Also, don’t forget to market yourself through social media, blogs, networking and other more traditional forms of marketing.

Your pitch

Once you’ve identified which investors to approach, the next step is to perfect your pitch. Sometimes you may only get 10 minutes to present your business opportunity to a prospective investor. Here are some short, sharp tips to ensure that you get it right first time:

  • Opening

Tell your story in a positive, concise and compelling way. Avoid a dry and boring presentation. Provide a short summary of your background and your successes to build credibility.

  • Product/Service

Explain what your product or service is, why it’s unique and what problem it will solve. Keep it simple and ensure the audience can understand it, especially if there’s complicated technology involved. Demos are a good idea if feasible.

  • Market

Describe your target market and why. What market research has been undertaken? Avoid saying that everyone in the world is potentially your market – be specific.

  • Sales & Marketing

Summarise your strategy for reaching your customers.

man-researching-where-to-find-investors-for-his-business

  • Competition

Detail who your main competitors are and why your product or service has advantages and benefits over theirs.

  • Team

Investors invest in people, so this section is key. Explain who’s involved and what their strengths are. However, if there are gaps in knowledge or weaknesses which need addressing, don’t shy away from this. Perhaps you may be looking for an investor with complementary skills?

  • Financial

Investors will focus on the finances and will be looking for a clear and concise summary detailing:

Profit budget: historic and realistic projections (3 to 5 years) including turnover, gross profit margin and bottom line profit.

Funding: how much funding is required and for what purpose. Summarise your cashflow forecast to substantiate the figures.

  • Exit strategy

Investors will be interested when you’re looking to exit the business and when (typically 3 to 5 years), be it a trade sale, flotation or something else. They will want their money back with a good return!

As mentioned at the beginning, chances are you’ll need a thick skin and an ability not to let rejection get you down. As the old saying goes: “if at first you don’t succeed, try, try and try again”. You may not find the perfect investor immediately so keep kissing frogs and hopefully eventually you’ll eventually find your prince.

Want finance that doesn't come from a bank?

Take a look at the alternative sources of finance you can apply for here

Written by:

Peter Beresford

Finance expert

Email Address: peter@red-sky.co.uk

Telephone: 07738 546400

Website: http://www.red-sky.co.uk/