How to find an investor for a small business from scratch? This question is often asked by young and aspiring entrepreneurs who have their own project and idea, but do not have money. Asking for help in getting money is a difficult step, however, you can find your investor by setting yourself the goal of implementing your project. How to attract investors to small business?
Searching for investors to implement an idea in a small business
How to get investment for a small business? When searching for sources of financing for a project, consider the following rules:
- do not delay deadlines;
- collect as much information as possible about the potential investor to avoid misunderstandings in the future;
- carefully calculate the amount of investment required;
- focus on specific goals;
- in the process of negotiations with an investor, be honest and open, do not hide important facts.
Useful video on the topic:
Bill Gross
The founder of giant investment company PIMCO is believed to have made his first money playing blackjack in Las Vegas. But success in business is not ensured by playing cards: Gross first studied at Duke University, then received an MBA from the University of California, and since 1971 he has worked at Pacific Mutual Life Insurance as an analyst. That same year, he created PIMCO, which he ran until 2014. Gross is a proponent of diversification and satisfaction investing. That is, investments, analysis, work on mistakes and success should bring both financial and ethical pleasure.
Its principles are a long-term forecast (studying news, comparing indicators, taking into account the season) and control over emotions. Gross believes that an investor's main enemies are greed and fear.
I have always been inclined to pay attention to those numbers that the market does not notice.
How to get investments for small businesses from the state?
Today, the Russian government offers a wide range of ways to promote the development of small businesses:
- allocation of state subsidies for the purchase of premises and fixed assets in the amount of up to 60 thousand rubles;
- grants for beginning businessmen in the amount of up to 60,000 rubles;
- compensation for previously received bank loans for business development;
- subsidy from the Employment Center up to 25 thousand rubles;
- assistance from Small Business Support Funds;
- subsidy for entrepreneurs aimed at developing innovative technologies (maximum 60 thousand rubles).
You can learn more about state support programs on the Russian Government portal (https://government.ru/).
Maximum personalization
This is what I encourage you to do.
It doesn't matter whether your potential investor likes spaghetti or golf, whether he conquered the South Pole along Captain Scott's route, or prefers to hang out with a cigar at the country club. You can learn all this about him simply from social networks; most likely, you already know each other after a couple of handshakes. But ask yourself this question: what are you willing to do to give your startup a chance to make the world a little better? There is no need to jump with a parachute, much less without one, just when writing a cold letter to an investor, address him by name and indicate that the reason you are writing to him is the fact that you can be very useful to each other. If you, as if by chance, find yourself at a party of potters, which you both are or managed to become just yesterday, then you will have more than 3 minutes of his scattered attention. You will get an interlocutor with related views and a completely different level of empathy towards you. Take advantage of this.
How to find a private investor to borrow money?
How to find a private investor to borrow money to create and develop a business? To obtain financing, there are online platforms specializing in business lending:
- Fundico is a shared lending service;
- Nimfamoney is a closed platform for investors and startups (loan amount from 100,000 to 1 million rubles);
- business.potok.digital - lending to entrepreneurs by private individuals.;
- vdolg.ru - deposits up to 500 thousand rubles to a bank card;
- loanberry.ru - online loan service for up to half a million rubles;
- townmoney.ru is a P2P lending service that unites the interests of borrowers and investors.
Target the victim
To match the resulting description of your company (see point 2), select the one that best suits your investment profile (see point 1), and therefore the right investor for you.
Obviously, the investor whose investment profile most closely matches the description of your project will be the most suitable for you at the current moment. As an example, I suggest turning to the already described investor and company profiles from points 1 and 2 above. The above examples can obviously serve as an example of a waste of time sending investment presentations by the company from point 2 to the investor from point 1.
How to find an investor for a business from scratch in Russia: 7 ways
How to find an investor to finance a business created from scratch in Russia?
I offer 7 options:
- Contact your family and friends - this is the option for financing your own business that is most often used by start-ups. And here the essence of the matter is not to borrow money against a receipt or interest - the essence of the matter is to turn a friend or relative into your partner and boss, and start earning money together. This investment option is optimal if the diet involves a small amount - many friends and relatives will not have a lot of money for your project, free amounts on hand. The main thing is to convince them of the profitability of your idea and the opportunity to receive their share of passive income.
- We are looking for a business agent . Today in the service market there are many agents - intermediaries between a startup and an investor who are ready to help you find a potential sponsor for a certain percentage or amount of money. Agents often unite in various associations and clubs - their coordinates can be easily found on the Internet and already on the spot have a more substantive business conversation. This option of finding an investor for your own project will be of interest to those who are planning to bring something grandiose and large-scale to life. Most often, agents have access and contacts with very wealthy investors, and if they like your project and it is approved, the matter will not be about finances. But they are unlikely to sponsor projects that will not bring in a lot of money - this is not their level, and here it is worth going and choosing a different option for finding investment.
- Crowdfunding . If we talk about this type of search for an investor, then this phenomenon means the help of the crowd or public funding, built on the principle of mutual aid funds. This phenomenon has been gaining a lot of momentum in recent years - this option of searching for an investor has gained attention and is therefore worth taking into account. The essence of this method of finding an investor and financing one’s own project is that a person publishes his own idea on one or another specialized website, his own project, and on social networks dedicated to this area, having written down the conditions for participation in the project - those under which he intends to attract financial activists. Anyone can take part in the project, and by contributing their part of the money as a percentage or a fixed amount, you can collect the amount necessary for the implementation of the startup. Most often, this method of searching and attracting investors is used in such areas and areas as charity in the field of medicine, financing non-profit projects - recording amateur music and holding festivals, creating films and holding exhibitions.
- Bank loan . An option for finding an investor is to contact the bank with your own developed business project, all the necessary calculations of investments and profits, and the payback period. But this option is possible if you have stable and official earnings and can make a certain deposit in the form of real estate or a car. This option is relevant if there is a need for a large amount of money, if the initial investment in your project does not require large financial investments - you can resort to financial sponsorship from microfinance organizations, where the conditions for issuing borrowed funds are somewhat softer, although the interest rate for using the loan will be higher than in jar.
- Platforms for attracting investment in business . If you don’t want to resort to the help of a bank or microfinance organization, you can visit specialized platforms for startups. It is on such specialized platforms that the necessary information for a beginner is posted - research and statistics, practical advice and assistance in launching new projects, plus data on investors, the ability to find their coordinates and contacts, investment conditions. In search of your own investor, you can visit online lending platforms. This is a kind of MFO or bank lending format. More specifically, such a platform could be Startups.co, which can act as a proven and reliable channel for finding a potential investor. As statistics show, more than 13.9 million potential users and investors have already been registered on the presented platform, who can act as both a consultant and a sponsor. Another proven platform that is popular among startups and investors is Gust.com - with its support, about 1.8 million dollars have been invested in many projects in recent years.
- Social networks of professionals are groups of potential investors that can be easily found on the Internet. Professional investor networks are a currently developed area where you can meet a potential sponsor working in one direction or another. Most of the sites presented on the network work with foreign investors who are ready to directly join the international, global business space.
- Business angels, private equity funds . If you need to find a reliable investor for your own project, you can contact a private investment company that specializes in this type of financial investment. What’s most important is that you can get approval for a variety of amounts, ranging from several thousand to several million dollars. What is the interest of the investors themselves - after a few years, to sell their own part a few years after the start of the startup. An example is the private equity fund Zunder Invest. But even if you were refused a loan of money, you were refused by a bank or an MFO, an investor - do not despair. Perhaps your investor has not yet met your path, or your project does not meet all the requirements of a potential sponsor.
TOP 9 ways to quickly get money for a teenager
Today, most fifteen to sixteen-year-old teenagers prefer not to ask their parents for money to buy, for example, any gadget. They are looking for opportunities to earn money independently in ways available to them. Let's look at where a young investor can get money to invest.
Get a job as a courier.
Courier delivery is a very common service. It is used for delivering, posting advertisements, documents, food or any small goods. Having a bicycle is an additional advantage when applying for a job.
Work at the post office.
Similar to the work of a courier. Upon reaching the age of majority, they may additionally be required to perform the functions of a cashier. They pay a little at the post office, but it’s enough for pocket money.
Cleaning areas in private houses.
More suitable for guys. Garden plots and lawns require constant maintenance: removing debris, leaves, planting or pruning plants, mowing lawns. It is in greatest demand in the summer.
Walking the dogs.
Take a look around to see if there are any nearby owners who constantly walk their pets, and offer them your services. After all, sometimes there is simply not enough time for this. The calculation is usually made after each walk.
Tutoring.
Every pupil or student has favorite subjects in which he excels and knows the most. Why not help the younger ones improve in mathematics or a foreign language? Teenagers usually charge less money for such services than professional teachers, and the effect is no worse. In addition, you can offer your services in preparing essays, tests or laboratory papers.
6. Assistant counselor at a summer camp.
Great part-time job for the summer. You just need to take into account that it is necessary to agree on such employment in advance. Summer camps do not always provide for such a position. But if the organizers are interested in your work, then in preparation for the summer season there will be an assistant counselor on the camp staff especially for you.
Car wash.
Typically, car wash services recruit employees of various ages. The main thing is a responsible attitude to work. You can offer your services directly to drivers, having previously agreed on the amount of payment.
Equipment repair.
Most teenage boys are interested in technology. Offer your services for repairing computers and other gadgets; this can subsequently become a constant source of income all year round.
Waiter in a cafe.
During the summer, many catering outlets equip summer terraces. Additional personnel are required to service them. Thus, you can earn good money, because, in addition to the salary, waiters who know how to serve visitors efficiently receive good tips.
Where to find an investor for a business from scratch: 5 options
To find investments, you can use the following tools and resources:
- Social networks for professionals (LinkedIn, EFactor, Xing, Plaxo, Startup Nation, Cofoundr and Meetup)
- Business incubators and accelerators (The best include Synergy Innovations, Ingria, the business incubator of the Academy of National Economy, the API Moscow business accelerator, the First City Business Incubator of St. Petersburg and others)
- Platforms for startups (the full list is below)
- Small business support funds and employment centers
- Investment club “Business Youth” (molodost.bz/investfund_OLD)
- Investor forums (investory.biz, investorov.net/forum, investtalk.ru/forum/)
Final preparations before the hunt
The question “when is it time to look for an investor?” We already raised it, let's look at it from a different angle.
- We learned our homework, that is, we prepared a Pitch deck and memorized the elevator pitch, we even practiced with friends and watched how people do it, for example, at the VC Kitchen.
- We know who our right investor is, including their first name, last name, LinkedIn or angel.co profile. In fact, we know or can find out almost everything about this person - the Internet, after all.
Almost everything is ready. Do not forget that we are looking for a sane, smart, cunning, thoughtful investor. All these qualities should work for you and your project in the future. Such a cunning beast will definitely check you when it becomes interested. We need to prepare. Get your social networks in order, especially the most popular ones, or those where the investor himself is present. As a rule, we hunt a couple of dozen specific people, so it’s worth bringing beauty everywhere. It also makes sense to create accounts for yourself and your startup on LinkedIn and angel.co. Don’t forget to make at least a normal landing page with a description of the project, its mission, team, and your expertise. Everything should inspire confidence in you, your team, its achievements and the startup itself. Think of it as a net that you use to catch the fish you catch.
Websites for finding investors in Russia and abroad: top 20
The most popular platforms for finding investors today are:
- https://business-platform.ru/projects/
- napartner.ru
Napartner startup exchange - towave.ru
- investgo24.com
- townmoney.ru
- investors.partners
- start2up.ru
- angel.co
- rusinvestproject.ru
- beboss.ru
- investclub.ru
- innovationportal.ru
- investstarter.ru/
- vse-investory.ru is a platform for online presentation of projects, created by the direct investment fund Zunder Invest.
- starttrack.ru is a platform that allows you to attract 3 types of investments - a loan, sale of shares in a business and shares.
- Simex is a platform for attracting investments in existing businesses and startups
- Aktivo - attracting investment in commercial real estate
- Tugush - financing the real sector of the economy
- rb.ru/pipeline/
- molodost.bz/investfund_OLD/ – investment fund “Business Molodist”.
Peter Lynch
Peter Lynch is one of the best investors of the 1980s. His Fidelity Magellan Fund had several distinctive principles:
- Don't work with companies that are growing too quickly.
- Invest in stocks with extremely low (to historical lows) price-to-earnings (P/E) ratios – undervalued stocks.
- Don't focus on forecasts.
Lynch recommends not following Wall Street analysts' forecasts, but rather understanding the company's business and studying the industry in which it operates. He believes that everyone is smart enough to start investing in the stock market, but not everyone has the endurance. For those who are prone to panic, he advises investing in mutual funds (UIFs).
In 1989, Peter Lynch described his ideas in the book “Strategy and Tactics of the Individual Investor.” His investment philosophy gained many followers.
In every industry and every region, an observant layman can find great growth companies long before the professionals discover them.
How to attract investment in business: ideas and platforms for startups
How to attract an investor to a startup is the first most difficult task that a novice investor who wants to realize his business idea will have to solve.
Where to find investment for a startup? To finance your project, you can use specialized online platforms for searching for private investors, the help of business angels, business accelerators and incubators, government support programs, and crowdinvesting platforms.
How to get investment for a startup? To obtain funding, the startuper must convince the investor of the viability and profitability of the project. To do this, you will need to cover the following topics in your business plan in as much detail and reasoning as possible:
- uniqueness and prospects of the project;
- demand for a product or service on the market;
- investment size;
- payback period of investments;
- projected level of profitability;
- guarantees for return of invested funds.
How to attract investors to a project quickly and without unnecessary problems? The search for investments and investors can be carried out using specialized online platforms:
- Boomstarter is a Russian crowdfunding platform.
- Planeta.ru is a platform that allows you to raise from 20,000 to 15 million rubles for the implementation of any creative idea.
- nachinanie.ru - service for collective financing of new projects
- Startups.co is an international platform for startups that allows you to solve the problem of how to find an investor for a project.
Where to look for a team?
To get even a fraction of an investor's attention, you need a working prototype and a team. It’s difficult to create a product alone, so you need to try to infect someone else with your idea.
Experienced entrepreneurs advise attracting like-minded people at startup events. Especially at hackathons, where you can see a person in action. You can search for competent co-founders using special services - for example, on the website CoFoundIt.ru, which recently launched IIDF (the base is formed from accelerator graduates). You can also always make inquiries from friends or call out on social networks, but in this case there is less chance of snagging an experienced specialist.
More information about team formation can be found here:
Where to find a team for a startup?
What kind of employees should you hire as your startup grows?
How to convince people to work for your startup
Never stop looking for new people to join your team
