Useful Tips for Entrepreneurs to Find Investors Online
Finding investors online for a crowsourced project is not easy, especially for not so popular start ups. It takes months, even years of time to convince one venture capitalist who might or might not fund your project. Entrepreneurs who are new into this field may find it even more difficult. The time and effort invested in this whole “Investor Search” process is immense. Convincing an investor for required capital amount is even more painful.
However, one has to look out for options and opportunities, though failures and uncertainties are the part of this job.
Let us see take an example.
You got an excellent business plan ready with you to show your fund raisers. You are optimistic about the project, its scope, and profit margin. The idea is to pitch 4 to 5 investors for the fund, get them approved and execute finally. However, after 2 to 3 months of rigorous attempt you find only 1 or 2 interested to fund on your project, but that comprises of only 25% of the capital you require. Rest 75% is not approved or assured. Even if you do some self investments or borrow from friends and relatives it won’t make up to 100%. Therefore, you are left dimensionless in the middle.
Thus a project usually drops even before it starts, i.e. in conceptual stage only. This is a typical finance related problem entrepreneurs face during fund collection. Projects that are not sponsored by top names or brands are the worst sufferers.
How to find investors? A big question
This explains how difficult it is to search or attract potential investors in this competitive business world. There are thousands of entrepreneurs like you who are similarly trying to get funds day in day out, probably from the same investor. Each of them has great business ideas to share and all look promising to capitalists. In fact, there is no dearth of entrepreneurship skills new age business people have. The ideas are so realistic that many investors get confused whom to select and whom to reject. A lot of other factors are involved into this as well.
Therefore approaching the right prospect and then winning the deal is worth gold. If you don’t have past record of successfully finished projects, you may not know the basics of searching or approaching investors.
Following ideas would help you get over with the challenges. However, it is up to you to exploit the opportunity as the success may vary depending on the occasions and persons involved.
• Avoid being reticent while sharing your business plan with investors, no matter it is your first visit to them. No one is going to steal your ideas. If you are afraid though, make a copy of the plan that is not completed yet and then show it publicly. If you are confident about your project, be sure, this much information will be sufficient enough to convince your prospects.
• Prepare a detailed business plan. It should include accounting details, revenue structure, prototype, drawings, negotiations, proposal drafts and anything that would consolidate the plan. You won’t get more than one chance to drive your best stroke.
• Be courteous and communicative in your approach. Answer each of the queries asked to you on project developments and growth. Speak only what matters to the investors. It is better to avoid any unnecessary topic or your personal matters.
• Don’t act in a hurry. You may be too optimistic about your B plan, but it does not mean you have to show it on face. Fund makers may consider it a wrong approach. Having any negative impact may put your credibility in question. Remember, investors are far intelligent than you when it comes to project selections.
• Estimating project cost is another area start ups fail to analyze most of the times. Many often they run short of money while the project is still ongoing. This may lead to imbalance in cost-work ratio and finally a sudden halt. Even if it gets finished, by the time it is over, investors start knocking doors for their share of profit. This is a pathetic situation.
• Employ right set of people for your projects who can really contribute significant.
• Prepare a good portfolio of yourself online. Link the previous works you did for other projects.
Now you may be wondering how to find investors online. Social Business networking websites are ways to start with. If you stick to the above mentioned suggestions, being successful is just a matter of time.
About Author:
Dan Rubin, the author of this article is the founder of Wubb.com – a complete social network for entrepreneurs. The Florida based company aims to reach out to all entrepreneurs who need to find investors for funding. He feels Wubb could be the next generation online marketplace for all entrepreneurial activities. To know more visit http://www.wubb.com
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