Financing a new business can be a daunting task as starting up a new venture requires huge investment. If you are looking to start up a new business, you will need money to get off the ground and cover early finances. Private business investors or angels play a vital role of raising start-up business capital to help your new business reach success. Angel private investors take a risk in investments and take interest in the companies in which they invest. Angel investors invest in all kinds of businesses – beauty products, entertainment, catering and cafes, web design, appliance repair, travel, retail, landscaping, and more.
Angel private business investors are typically successful entrepreneurs that consist of ex CEO’s and business owners. These investors offer expertise, experience and contacts that can be invaluable to the new venture. Although there are many angel private business investors across the country, they can be difficult to find.
Finding Private Business Investors
These small business private angel investors look for companies that exhibit high-growth prospects, have a synergy with their own business or compete in an industry in which they have succeeded. Private angel business investors are a good alternative to banks and venture capitalists for some cash-strapped small businesses. Finding private investors for small business can be a hard task if you do not know where to find them. And once you discover where to locate them, the hard work will surely be worth it. Here are some places for you to look for your private business angel investors:
- Some universities with business programs are a good place to start. This is where private business angel investors usually come down since there are high levels of start up business activities the university produce. It will be a good step to contact the people running the entrepreneur program of the universities in your area. They can surely point you to a prospective private business angel investor easily.
- Business incubators offer access to the angel investors to companies that may have a need for them. Contact association of business incubators in your area and you will find many private business angel investors to choose from.
- Groups, clubs and confederacies of private business angel investors have been around since 1990s. All the members of such associations are all looking for business deals available for them.
Despite the relative obscurity of angels, it takes much less time, on average, to meet with and receive funds from a private business investor than a venture capital firm. The due diligence is less involved with a private business angel investor and angels typically expect a lower rate of return. Unlike venture capitalists, angel private business investors are willing to wait for longer periods of time before receiving their return on investment. Angel private business investors are mostly concerned with the success of the business and are willing to do what it takes to see the business grow and succeed. Instead of requesting a large share of ownership in the company being funded, angel private business investors usually will want to have an active role in the management of the company and use their experience to get the business off the ground.
You can take services of professional investment consultants to can help you find private business angel investors to finance your business for a set fee.
Finding private investors for small business has become much easier with advanced communication media, such as the Internet, angel search programs and with access to angel investors via TV programs like Dragon’s Den that feature investors willing to invest in business ideas. These private investors for new businesses are valuable resources who can use their experience to guide your business in the right direction.
Types of Private Business Investors
Entrepreneurs dream of opening their own business but most of the time this dream depends on how much money they may have available. When small business owners have the dream but not the financial backing there are some things they can do to get start-up money. Usually, it is not easy and they have to knock on many doors. Plus the economy situation may not help. But regardless of the economic conditions, there are some things you can do to get private business investors to back your dream business. The first thing you need to have available is a good solid business plan that you can market to potential private business investors like below:
- Partners – Getting a partner is one of the first things to consider since you are looking at finding private business investors to lend you money for your start up business. You should see if you know someone with money available that may want to go into business with you. Or you can also try to find potential partners by joining business clubs and associations. The key is to find someone that thinks like you and is willing to take the calculated risk of investing in your business. The important thing after finding the partner is deciding if the partner will be active or silent in the business dealings and drafting a comprehensive partnership agreement that covers these points.
- Commercial banking – You can apply for a private loan or a small business loan through your current bank.
- Venture Capitalists – These are people who wait for people like you to approach them if you have the right business idea that can make them money if they give you money to invest. Many big companies started with an idea and venture capitalists that took a chance with them, and ended up making the Venture Capitalists and small business owners extremely wealthy.
- Lending Clubs – There are clubs that lend money to start up business. They do require that you have a credit score.
- Angel Investors – They are similar to venture capitalists in that they are willing to take a chance and invest their money in your start up business but will require you to keep them involved in the development of the business to ensure their investment pays off.
Finding the money to start your small business will probably be tough, but making your dream a reality, working for yourself and making lot money with your own idea, determination and hard work is worth all the effort you may have to invest in the beginning.