Business Investors
In this discussion, we are
going to continue our discussions as it pertains to for business investors. When
looking for business investors, you're going to find that one of the most common
difficulties that you're going to have is that all finding is a suitable
investor that wants to work with your small business is difficult, but you are
going to also have negotiating issues with the individual groups of individuals
that are looking can make an investment into your firm. When you are looking for
business investors, it is important to decide the demographic profile of the
specific type of investor that you want for your business. A common mistake
among many entrepreneurs that are seeking capital for with any potential
individual that is willing to put up a certain amount of money in exchange for
an equity interest in your business is that too much is provided to a potential
business investor. As such, similarly as you have developed a demographic
profile for the customers that we by using your business on an ongoing basis you
should also developed a profile of, again, the individual that you affirm that
you want to work with your company as it pertains to the investment that you
need in order expanded business. One of the common things you should ask
yourself when determining the type of business investor that you're looking for
is whether or not this individual wants to have a passive and let investment for
whether they want to be an active part of your company.
When looking for business
investors, there are a number of different resources that you can use that will
assist you in finding the angel investor capital or general business capital
that you seeking to effectively expand a board develop new business. One of the
most interesting ways that you can find business investors for your new company
or your existing company is by directly in becoming a member of your local
Chamber of Commerce. There are a number of individuals are that have available
capital for promising new enterprises while concurrently continuing to work with
you in regards to providing you with a capital that you need. We strongly
recommend that if you are going to enroll in a local Chamber of Commerce as it
pertains to your capital raising needs then you should have a properly prepared
business plan that you can present to a potential business investor prior to
contacting them or all of them directly. If you are able to do so, it is more
likely that you'll be able to find a suitable investor quickly so you can launch
the operations of your business. Again, one things you should also have prior to
starting the capital raising process or prior to looking for business investors
is that you should have a certified public accountant as well as an attorney in
place that can assist you with the ongoing negotiations and legal formalities
that are necessary when walking with a angel investor or business investor.
This, of course, that is actually important, as time progresses, and as you work
with business investors the one make sure that all the contingencies that you
may face as you progress in your operations are properly dealt with by the time
that you sell a equity interest in your business to a third party. This will
ensure that if there is any issue in the future that any contractual obligations
that you have not met will be well known to the business investor. By addressing
these issues appropriately and quickly in a fashion I that have been spelled out
by an appropriately drafted contract you will save yourself a tremendous amount
of headache.
Other ways that people engage
in when looking for business investors is to go online. This has become a very
unique and new source of capital for many people that are looking to launch new
businesses. This is primarily due to the fact that a number of angel investors
as well as angel investor groups have launched websites that specifically
targets businesses that have unique concepts for our economically viable and are
in need of capital. As such, it may be beneficial for you to take a look on a
number of varying websites out there that can assist you in raising capital or
directly providing the capital. TheFinanceResource.com has recently launched a
new business venture where we have developed a number of relationships with
lenders and investors across the country that you can use to present your idea
of in your business plan to third parties. We also recommend they take a look at
this new program and we certainly will answer any questions as it pertains to
looking for business investors are more than happy to answer these questions for
you in a very timely manner. However, at with any program that is available on
the Internet that seeks to provide your business with investment capital you
should be wary, from time to time, of certain websites that promise a lot in and
take large fees on an ongoing basis without appropriately delivering results
that you're looking for. One of the ways you can quickly determine whether or
not an angel investor portal is a legitimate source of funding for your new
business for existing company used to double-check their references and reviews
across the Internet. Anytime that you conduct business within Internet, we
strongly recommend that you make sure they are legitimate business and are able
to provide you with the services that you need on an ongoing basis as it
pertains to your business planning needs, your capital raising needs, looking
for business investors, looking for angel investors, or securing other types of
financing the your company is looking for in order to effectively expand its
operations. In doing so, you'll have much better experience as it pertains to
looking for the capital you need from third parties.
It is absolutely worth the time
it takes to when looking for business investors and you anticipate that it can
take up to 12 months to secure the appropriate capital you need in order to
finance your new business for you and company. This is primarily due the fact
that when you are looking for business investors you first need to find an
investor that you like, and it is willing to make the appropriate investment on
terms that are favorable to you and your business. As such, in addition to
having a very well developed business plan, we also recommend that you have a
well developed capital raising plans that completely spell out your most ideal
terms as it relates to get receiving funding for your business. If you able to
do this effectively, you will save yourself a tremendous amount of headache and
heartache as it pertains to capital raising process. One of the , best things
you can do as it relates to looking for business in that service is to work
directly with your certified public accountant or other business consultants as
it relates to these capital raising activities that you're seeking to engage.
This is primarily due the fact that not only will these individuals be able to
provide you with the advice that you need, as it relates to capital raising, but
they will also be able to effectively introduce you to potential business
investors that you can discuss the needs of your business as it relates to the
expansion or development of your company.
You must also remember as you
progress through the capital raising process and as you are looking for business
investors, it's important not to become disheartened as you go through this
process. As we said before, this process can take up to 12 months in order to
effectively engage on it as it relates to getting the business investor
financing that you need for your new business development, your new business
venture, or your existing businesses that seeking to grow substantially over a
five-year timeframe. Although the TheFinanceResource.com offers business plan
templates that offer a three-year financial model, we strongly recommend that if
you are actively engaged in the business of looking for capital that develop a
five-year business plan while providing anticipated five year financial results
can be investor. If you are unable to appropriate appropriately develop a three
year financial plan or five year financial plan, we strongly recommend that you
work with a certified public accountant, an attorney, a business consultant that
can actively assist you in the appropriate development of your business plan to
showcase to a potential angel investor or network of business investors.
You should be aware about aware
of, as it pertains to looking for business investors, is that you may need to
have a private placement memorandum drafted in order to for you to legally pitch
your investment idea for your business idea to a third-party. This is primarily
due the fact based on Securities and Exchange Commission rules as well as state
security's commission rules as it pertains to raising capital from third parties
on a private basis. You cannot simply put out an advertisement that you are
looking for capital from a third party. For instance, if you're looking for
business investors - you cannot take out a classified ad stating that you are in
need of capital and are willing to sell a certain percentage of your business to
a third party in exchange for a certain amount of capital. There are very well
defined and very enforced rules as it relates to obtaining investment within the
United States and can't currently among the 50 states that maintain their own
individual securities commissions. In regards to the private place memorandum,
as it pertains to looking for business investors, only in a qualified attorney
that has experience in the field of securities can make the appropriate
determination as to whether or not your business needs highly specific document
in order to effectively raise capital. Again, we strongly recommend that you do
speak to a qualified attorney that can provide you with the appropriate devices
that as you progress through your capital raising activities, and when looking
for business investors, that you remain within the letter of the law as it
pertains to selling an interest in your business or raising debt capital from
private parties for your business. Time and time again, we've seen a number of
our clients fall into traps as a relates to not having the appropriate legal
counsel to place and have ultimately ended up having issues as it has related to
capital raising activities from private business investors. If all the
appropriate documentation is in place, as it pertains to looking for business
investors, then you will be in a much better situation as you seek out the
capital that you need in order to effectively expand and grow your business.
For business investors, you
also need to determine how much of your business that you're willing to sell in
order to receive the capital that you need for your business expansion or
business development. As we've discussed in some of our previous articles, you
can anticipate that depending on the current state of your business affairs that
selling 20% to 80% of your business to a third party. This may be a very
appropriate methodology in quickly raising capital you need in order to launch
or expand your business operations. Additionally, one of the things that we've
also mentioned is that if your business is operational, profitable, and
producing a positive cash flow to be a much better position to negotiate a
smaller at resale of your business as it relates to obtaining capital. Primarily
this is due, again, to the fact that if your business is already operational and
profitable the options as it pertains to raising capital are much greater to you
on that if you are a start up business that has no operational history. As such,
we recommend that if you are able to launch business operations on your own that
you do so in that you will be able to raise capital a much easier capacity as
time progresses. This, of course, speaks again to the valuation of your business
when a potential business investor is looking your company as a potential
investment for their portfolio. As such, again, having in operational business
that is generating income is worth far more than simply a business concept or
idea that could potentially become profitable in the future.
Returning to our discussion
regarding look looking for business investors, we recommend that you focus on a
number of different methodologies that you can use in order to attract the
potential investment that you're seeking. Again, this includes registering your
business with the your local Chamber of Commerce, searching online among the
number of different directories that are out there that assist individuals with
raising capital for small businesses, as well as contacting small business
investment companies that are licensed by the Small Business Administration so
that you can potentially receive an equity investment that is backed up by a
venture capital group that functions in a similar capacity to that as a small
business investor or angel investor. We encourage you to take a look at all the
options are available to you before deciding as to which method of raising
capital and the type of capital that you need is most appropriate to you. Again,
receiving advice from your certified public accountant as it pertains to the
type of capital that is best for your business is absolutely imperative before
you begin the process of looking for business investors. If you are already an
existing business, there may be a number of programs available to you to receive
debt capital for your business which will allow you to maintain complete
ownership of your company will simply making a monthly loan payment to a bank or
financial search engine that specializes in assisting established businesses
with expansion. Not all instances of business growth require that you look for
business investors. This is especially true if you have been in business for
more than three years. If you have been in business for a period longer than
three years then you may be in excellent position to receive a traditional bank
loans for SBA backed bank loan of having to sell a negotiable equity interest in
your business. Primarily, it is true to the fact that banks are very willing to
lend to established companies that do have operating history that exceeds three
years. This is typically the standard that, especially in today's economic
climate, as it pertains to business investment through loan capital rather than
seeking equity capital from a business investor.
In conclusion, the main points
of our continued discussion, as a relates
to looking for business investors or angel investment, is that you should
thoroughly develop a specialized plan as it relates to your specific capital
raising activities. You should look at your existing concept, existing business,
for specialized nature of the business that little value to appropriately
attract the investment capital or debt capital that you're seeking from any
business investor for a from a bank if you appropriately qualify for a loan.
Additionally, and again we cannot stress this enough, is that you have all the
appropriate counseling place including a certified public accountant as well as
an attorney that is well versed on securities laws as long as you progress
through your capital raising activities and as you are looking for business
investors. TheFinanceResource.com has made available a number of different tools
that you can purchase from a website that will assist you in this process, but
again, it is imperative that you seek the appropriate advisors that will forward
your capital raising activities as time progresses.