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Small Business Insight

How to Attract Investors for Your Business

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Seeking business investment is an exciting – and potentially nerve-wracking – stage of development. You have to convince outside parties to put money and expertise into your endeavor. In return, you get a financial boost and the added motivation to grow your company.

There are ways you can make this process easier. Be prepared and do your research before those important meetings. Don't forget to review all of your financial options in addition to investment, so you can make a sound choice.

Your Sources of Financing

There are many ways of getting startup business capital, and investing is just one. You can use personal savings, contributions from friends or family, or a bank loan. If you are too big a risk for a bank, look into a loan secured by the Small Business Administration. Also, microlenders can help with modest amounts under $50,000. Microlenders often serve disadvantaged communities and give small business owners a leg up on the path to success. One of the advantages that Velocity Merchant Services offers their customers of small to mid-sized businesses is a special loan called Working Capital. These are all great ways to bring money into your business, and usually don't require you to give up an ownership stake. 

Signing on an Angel Investor

If you are ready to bring on outside investment, you have to make a convincing case. You should be ready to pitch the benefits of your business and of you as an entrepreneur. Typically investors receive a stake in the business in exchange for money. They want reassurance they are investing in the right product -- and people. Here's what you have to show investors:

• Your pitch for the company

• Your marketing plan for the business

• How your product solves a customer problem

• Your business' competitive advantage in the industry

• Your history as an entrepreneur If you are seeking venture capital funds, your business is probably at a later stage. You may have to give your potential investor detailed financial statements, marketing and business plan. Angel investment is for earlier stage businesses, when you may not be expected to have as much of a sales history or proof of concept.

Here's what investors will look for:

• The viability of your product or service

• Your experience

• Your numbers and business plan

• The coachability, passion and commitment of your team

In short, they want all the elements that will assure them of a strong return on investment.

Seek Advice Before Pitching

It's always a good idea to ask for help with one of the biggest moments in your business career. Solicit coaching through mentorship programs or community services designed to help small businesses. They can help get you on track for that new source of investment and growth.

Some other blogs you may be interested in on this topic are The VMS Solution To Working Capital and Get The Working Capital Your Business Needs.
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