If you’re looking to start your own business or scale up an existing business, chances are that finding the right investor is a critical element in your future success. Choosing the right investor for your business is incredibly important and will have far-reaching effects on your business. Take these things into consideration as you begin your search.
Different Kinds of Investors
Are you looking for money from an accelerator and incubator, angel investor, bank or government agency, or a venture capital firm? Understanding the different varieties of investors will help you choose the right one for your goals. Looking into what an investor or investment group’s goals typically are, the kind of timeline they like to operate in, and what point in your business’s growth they like to invest at will help you make an informed decision regarding whom to contact about their interest in investing in you.
Understand Your Non-Monetary Needs
Investors can offer more than just money to help you grow your business. Choosing an investor with previous success in your industry could open up a significant business or consumer network for you. Knowing the non-monetary roadblocks to success you’re currently experiencing is crucial when considering new investors. Investors like Amandeep Khun-Khun who specialize in commercial real estate could help you find a much-needed storefront, while others may have existing connections to help you distribute your product or service to a wider market or fill gaps in your supply chain.
Know Their Other Commitments
Chances are you aren’t the only entrepreneur that an investor will be working with at any given time. If you’re looking for a considerable amount of non-monetary support from them, knowing the extent of other commitments they have could help you avoid disappoints and frustrations down the road if they don’t have as much time to dedicate solely to your business as you might have hoped for.
Sync Your Clocks
Not all investors are looking to work with a business in the long-term; some may be looking to get in and out as quickly as they can recoup their investment or turn a profit. Take time to have a discussion about the timeline a potential investor is looking to work with you in and know before starting that conversation whether you’re looking for a short-term or long-term investment.
Check Their History
Knowing how an investor’s prior investments have fared will give you an idea of what to expect in your relationship with them. Do research on your own into other businesses an investor has worked with, particularly ones that are in a field similar to yours. Consider contacting the founders of that business to learn about what their experience with the investor was like, especially how the investor handled any challenges that arose during their time together.
Feeling confident that you’ve chosen the right investor to work with you as you further your business can make all the difference in the world. Taking these factors into consideration before and during your search for an investor will help assure you that you’ve made the best choice for yourself and your business.
