10 Strategies that Attract Investors

As a budding businessman you probably know that money is the scarcest of commodities to obtain if you don’t have a track record of success in business. It is not always practical to approach a bank for loan. Banks generally prefer to lend to companies that are able to show good profits in the past. So how does a start-up business raise funds? The best market research companies and consultants recommend investors. Investors are preferred because, they don’t ask questions like banks do and are more business friendly. They are likely to be more accommodative to radical ideas that have never been tried or tested, but look good from an investor’s perspective.

 
As a rule it is good to cultivate your relationship with investors. We say you “investors” because you will need more than one for ideas that need more money.

Businessman attracts money with a large magnet

Here are 10 strategies that you can put to use for cultivating good relationship with investors.


Develop a Formidable Network

Nothing works like networks. Participate in networking meetings, conferences and people who you know regularly invest in risky ventures. Be open to discussing your plans however fanciful it may be. To create a network, you will need a well written business plan by one of the best market research companies. The advantage is you get neutral views.




Nothing Works Like Experience

Associate people who have experience in your chosen business – The first thing that all investors will want to know is the kind of people you will keep in your venture. If you have people with expert knowledge, you stand better chances of being funded.

 

Share and Grow

Be willing to share your success with investors – The first foremost reasons for investors to invest in start-ups is to make more than normal profits at the cost of safety. If you are willing to offer more stock, your investor will be inclined to look at your project favourably. Be liberal in sharing.

 

Innovate to Succeed

Choose projects that are innovative – Run of the mill projects seldom attract investors. Investors are investors because they like the thrill associated with it. Have a solid business plan prepared by the best market research companies. It adds credibility to your ideas and builds confidence in investors.

 

Don’t Lose Sight of Reality

Be realistic and provide for exigencies – Without exception shrewd investors know that even the great ideas supported by best market research companies can go wrong at times. Always have an exit plan for the investors so that their investment is not jeopardized. This encourages investors to say yes to your projects.




Prove Your Team-building Skill

Have a good team around you. Investors are generally more receptive to ideas that flow from a group of people than from an individual. You can use your network not only for raising funds but also for finding partners with specific skills. Investors will be really impressed with people who have the knack to hold their folks together.

 

Leverage your Achievements

Prove that you have the right skills to see the project go through successfully. Demonstrate that to the investors with your past achievements. It could be some products you had developed or even an award you had won.

 

Big Stakes Build Confidence

Keep a large chunk of the company’s stock with you or your family. It will help you to prove your commitment to the business and the enormous risk you have already taken. This will help investors make a better evaluation about your staying power and your own continued presence. You need to sell yourself even before you have sold your project or ideas.

Explore the Inner Circle First

Give much importance to your friends, associates and relatives. They are the ones more likely to invest in your ideas. It is easier to convince people you already know, provided you have a good track record for accomplishment.





Treat Your Investor as a Partner

Choose your investors wisely. Wrong investors can cause much damage and they may not be understanding to your needs. The right type of investors will not only contribute in cash but also help you with developing a network, introduce you to valuable contacts and generally add value to your growth objectives.

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