Entrepreneur Investor Network » business angels

Private investors and what they look for in a business

admin — Thu, 20 Aug 2009 04:13:41 +0000

Private Investors

If you’re a budding entrepreneur, chances are you’re thinking about ways to raise investment. One of your options could well be investment from a private investor. But what actually are private investors, and what do they look for in a business?

Private investors come under many guises, be they business angels, venture capitalists, capitalist firms, a partner in business or many more besides. But the one thing they all have in common is that they’re all successful entrepreneurs in their own right, and that they’re all looking to invest in businesses that they can add to their portfolio. They have the potential to bring a large amount of investment to your venture, and have the experience to back it up.

Private investors have usually been involved in a number of successful businesses before they get to yours. This means that they know what to do to make a business a success, and will be able to bring their years of knowledge to make your venture just as much of a success as their previous ones. But, being so experienced also means that they know what to look for in a business, so make sure you can cover all the areas.

Partner in business

Firstly, an investor looks for a business that has potential for growth. Growth means profit, and it’s the only way that they’ll consider investing. Private investors have put their own money on the line, so they need to see that they’re going to get a good return on it and that it will be worth the risk.

They’ll also be looking for entrepreneurs who can see where their business is going and who have the ability to take it there. Make sure you have a sound business understanding, not only of your own business but of the wider market as a whole. You need to know your finances inside out, and they’ll be looking for a business plan that has everything spelled out for them.

Investors need to see a clear exit strategy from the investment opportunity. This is usually in the form of profits or the eventual sale of the business, so make sure that you’re offering them a good proportion of the business to make it worth their while. They’ll need to see a fairly quick return on their investment, usually liking to see some profit coming back to them within the first 5 years, so make sure that this is part of your vision as well.

Business angels

Private investors can be a great asset to your business, and now you know what they are and what they look for in a business, you’ll be more likely to attract them to your own potential money-maker.

Business angel investors and what they look for in a business

admin — Sun, 09 Aug 2009 22:02:43 +0000

If you’re a budding entrepreneur, chances are you’re thinking about ways to raise money for business. One of your options could well be investment from a private investor. But what actually are private investors, and what do they look for in a business?

Private investors come under many guises, be they business angels, venture capitalists, capitalist firms, business partners or many more besides. But the one thing they all have in common is that they’re all successful entrepreneurs in their own right, and that they’re all looking to invest in businesses that they can add to their portfolio. They have the potential to bring a large amount of investment to your venture, and have the experience to back it up.

Investors need to see a clear exit strategy for them to reap their reward. This is usually in the form of profits or the eventual sale of the business, so make sure that you’re offering them a good proportion of the business to make it worth their while. They’ll need to see a fairly quick return on their investment, usually liking to see some profit coming back to them within the first 5 years, so make sure that this is part of your vision as well.

If you are looking to raise money for business register today and find a business angel investor to fund your business.

What can an angel investor bring to my business?

admin — Mon, 13 Jul 2009 10:22:46 +0000

Start-up businesses are always on the lookout for ways to secure an investment that works for them. Private investors are a great place to look, and angel investors in particular can be extremely beneficial if you’re a start-up company seeking that initial push. But what can they bring to your business?

For starters, angel investors can usually offer more money to your venture than you can get from traditional routes. They won’t be asking for unrealistic interest rates or payment schedules either, but instead will opt for a proportion of the business.

This, too, can be beneficial. Because they’ll be investing their own money they’ll have that extra incentive to make it a success, as if the business fails they’ll lose all their money. This means that they’ll usually take an active role to ensure that it works.

Even better, angel investors are usually successful entrepreneurs already, so their active role will bring a wealth of knowledge and experience to the table. This can often mean the difference between the success and failure of a business, as if you’ve got someone on board who’s already a success and know what works, you’ll be more likely to succeed in the current venture as well.

If you look for an investor who already has experience in the field your business occupies it can be even more advantageous. If they’ve run successful business in your area they’ll bring their specialised knowledge and will know the specifics to make it a success, and any nuances will already be accounted for.

The experience of an angel can be invaluable to any start-up business. Often, although a start-up will have the business mapped out in front of them, actually doing it for real can bring new challenges that they never even thought of. Having someone who already knows how to cope with these challenges means that you’re more likely to overcome them.

Never underestimate the value of the contacts that an investor can bring as well. Not only will networking be a breeze with a respected entrepreneur in your team, but you’ll also be more likely to secure future investment if someone in the field already has faith in you.

Angel investors are a great way to secure investment, and should definitely be considered if you’re looking to raise finance. As you can see, they can bring a huge amount to your business and can make it a real success, and you’re far more likely to be profitable with the help of an experienced entrepreneur behind you.

Will venture capitalists be interested in my business?

admin — Mon, 22 Jun 2009 01:39:17 +0000

If you’re after investment for your business, one of your options could well be a venture capitalists. But will they be interested in your business? Well, it depends on what you’re offering. Venture capitalists usually has a specific set of criteria that a business needs to pass before they’ll invest, so make sure your venture ticks all the boxes.

First up, a business needs to have great potential for growth. Growth and profit is the primary goal of any venture capitalist, and is the only way that they’ll even consider investing. Make sure that your business has this potential. Usually, venture capitalists need to envisage this growth happening within 5 years, otherwise they won’t be interested.

Even if it’s a unique or unusual idea, don’t be put off. It’s often the most unusual or seemingly risky ideas that will make the most money in the long run, so make sure you portray this to your potential investor. Investors are never put off by risk, but if your business idea is boring, has been done too many times before or has no chance of making a profit, there’s no way that a venture capitalist will be investing.

Venture capitalists will only invest if they have a sound business plan presented to them. Your plan really needs to stand out and have all the facts and figures that they’re looking for covered in a clear, well-presented manner. You need to make sure that you cover all areas of finance and financial forecasting, so have a sound grasp of all the figures before you approach them and convince them that you can do what you’re planning to.

You need to offer them a decent share of the business. If it isn’t worth their time and money to invest, they won’t be doing so. Also, you need to have a clear exit strategy in place for them to get their return. Obviously, they need to see that they’re going to get their money back and that they’re going to get a nice return on their investment. Usually this is done in the eventual sale of the business, so if you can’t bear to see your business being sold, they won’t be interested and you shouldn’t consider them as an option.

So, a venture capitalist will be interested in your business if it’s a large company with huge potential for growth and return, if you know your figures and they can trust that you can take the business to the next level, and if you can offer them a decent share with a clearly marked exit strategy. As long as you cover all of these aspects, there’s no reason why you won’t get a venture capitalist interested in your business.

Why Business Angels Invest in Start-up Ventures

admin — Thu, 23 Apr 2009 04:04:25 +0000

It sounds like a dream come true, doesn’t it? Someone who is willing to hand over their money so you can start a business? Who are these people? Where do I find them? Why would they do this?

The fact is there are people out there who invest in businesses. They are called business angels, or private investors. Often, they will provide the start up capital a new business needs to get up and running. They are business owners and entrepreneurs who have made their own fortunes. No matter what part of the country you live in, chances are there is an investor you can partner with. There are several reasons they do this.

As an investment they find what they deem a great business that has a good profit potential. They want a good return on their money, they are investors after all.

To share their skills they want to share their skills and experiences with others who are just starting out. By teaching you the day to day skills of running a business, they are able to reduce your learning curve, and therefore producing a profit in less time. This is their way of giving back; of helping others.

To learn it might sound strange, but successful entrepreneurs know that they should never stop learning. Everyone brings unique ideas and experiences with them. They may learn a different way of doing something or a new technology that was not available to them when they were starting out.

It’s important to point out that business angels do not invest in any business they see. You must be prepared and present a professional, complete business plan with growth projections, income and expense forecasts, marketing ideas, mission statements, etc. They will want assurances that you are completely committed to the business and will not walk away when things get tough. Meet with several investors and choose wisely; someone you will feel comfortable working with. Don’t be surprised if they want part ownership of your business, at least until it starts making a profit. They will want to be part of every major decision. Step back and learn do what they do. Eventually you will become a successful entrepreneur and you’ll be able to invest and help other people in start-up businesses.