How to Find Investors
Ok, so you've set up a new business, you have managed to get a few sales, and you can see the potential for your company. It's time to find an investor or two. But from where?
First step: friends and family
It seems to surprise a lot of people as to who their friends know. It has been suggested somewhere that there are only six degrees of separation between you and anyone else on the planet. That means a friend of a friend of a friend of a friend of yours knows Bill Gates, her Royal Majesty the Queen, or anyone else you care to name. Start off telling your friends that you are looking for an investor, and it can be anyone with money. Quite often, people in property or law have surplus cash and like to (or would consider) investing in a new business, though they may not have advertised it to some of their friends. Ask your friends if they know any lawers, property owners, or other 'wealthy' individuals that might like to invest in a company
You can of course also receive money from your friends, maybe someone has come in to a winfall, for instance. Be wary of this though, as it can put an enormous strain on relationships. It works the other way too: you don't want to be worried every day by the fact that your auntie has lent her pension payout to you and if your business fails she becomes peniless!
Second Step: Networking
The second place to start looking is in networking clubs and forums. There are loads of such clubs and groups around, some are free, some have paid membership. We have listed a selection of good ones on the
networking services page. These organisations either either a regular mailing list and/or regular meetings and events, where you can get together and talk to other entrepreneurs and investors. Just by talking to other entrepreneurs will probably net you the names of a few business angels, and from those you will gradually expand your network of contacts further. Networking really
is the way to go. It has often been said that people have joined golf courses just to get business from the social networking that naturally occurs in any club.
Third Step: Investor match-up web-sites
The last place to go is to investment web-sites, but you have to be careful here. There are a multitude of such sites available, many of them offering to put your business idea in front of tens or even hundreds of investoes. Most of these sites ask for money, in some cases several hundreds of pounds. I typically find these an absolute waste of money. It is a typical root taken by many a green entrepreneur as it's the easiest one. But it is also the easiest way to throw away loads of money that should be very precious to you at this time. If you have completely exhausted all of the options above, then I would suggest a site such as
Company Partners, that has a very low membership cost of anything from £20 to £40 per month.
However, do not rely on investment web-sites alone. The key here really is to get out and network as much as possible. It takes very little effort. Even if you are shy by nature, in order to suceed in business you are going to have to develop some confidence skills so that you can deal with the multitude of people you will come across on your journey. You may as well start hoing those skills now.
