There are many reasons why a business would want investor support. It gives them access to extra capital, the investor’s expertise and experience, a chance to expand their team, and the opportunity to meet growth targets faster.
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Not all Nigerian businesses are keen on being invested in by persons or institutions external to them. But if you would like to find investors for your business, there are many ways you could go about it. This article explains the basics you should get right to attract them.
First, let’s look at what investors want in a business that’ll make them stake their money on it.
What Investors Look For In A Business
- Founders who are knowledgeable, skilled in the relevant areas, driven, and possess integrity.
- Legally registered with the appropriate bodies.
- It solves a real problem, and there’s a substantial and growing market for the solution. This suggests a potential for growth and profitability.
- A properly compiled business plan that charts a clear course for the business, and a business proposal that spells out what investors stand to gain.
- A well-laid-out plan for the deployment of investors’ funds in the business.
- Business valuation based on available facts and quality projections.
What Kinds Of Investors Do You Want?
Investors come in various forms and sizes. They could be your family, friends, social club or network, business partners, corporate institutions, or investor bodies. You may find the support you seek from any of these groups.
In formal settings, the potential investors you’re likely to encounter will fall into one of these categories:
- Private Equity Firms: These organizations are constituted as funds or limited partnerships that pool and invest financial resources in viable, highly profitable businesses. The funds managed by Private Equity firms are usually provided by High Net-Worth Individuals and larger companies. They often target more established businesses.
- Angel Investors: An angel investor is a person (usually a High Net Worth Individual) who gives financial backing to a business, usually at its earlier stages. They provide investment and get a stake in the business in return.
- Venture Capital: Unlike Private Equity, Venture Capital targets smaller businesses that are in their earlier stages of growth. In addition to funding, they also provide mentorship and take a lesser stake (less than 50%) of the business compared to Private Equity.
Where Can You Find Investor For Your Business?
How you’ll find potential investors will depend on the type of investor you’re looking for. If you’re hunting for support from the ranks of acquaintances, or members of your social groups or network, you may find these people at occasions they attend, or by contacting them through various media.
Find our comprehensive listings of businesses in Nigeria here https://businesses.connectnigeria.com/
The process may be different for more formal investors, like VCs or angel investors. Some of these entities will put out calls for applications; others scout potential investments by themselves; many are open to pitches from businesses and startups. Know what works for the investors you want to attract, and proceed accordingly.
Steps To Finding Investors For Your Business
Here are the steps you can take to win over investors for your business.
Be Clear About Your Reason For Seeking Investment
Why do you want external funding? How will it help you achieve your aims? What aspects will funding help to improve? And how will those improvements lead to better bottom lines for the business?
The answers to these questions should help you know how you’ll deploy investor funds if or when you get them. And this knowledge may increase your likelihood of receiving that funding because investors will see that you’re clear about your purposes.
Come Up With A Great Pitch
Crafting the perfect pitch can be hard. But it’s doable. It should have an attention-grabbing introduction, a clear vision of what it exists to achieve, a solid plan for making it work, and an exit strategy. You want to show that your business has a strong Unique Value Proposition, is viable and profitable, and is a great find for the investor.
You stand a better chance of securing investment if you’re already known by the public. It’s a sign that you’ve been around for a while, and that you’re not some mushroom organization waiting to rip off investors. This isn’t just about continuous marketing campaigns (although marketing is important). It’s more about delivering great products and services and getting recognized for it.
Be Ready At All Times
You never know when the chance of meeting with a potential investor could happen. Be ready to make a good presentation, whether you’re pitching via formal channels and expecting a response, or attending a meeting in which interested parties may be found. When you’re ready, you’re more likely to make a good impression.
Investors are always on the lookout for exciting businesses to invest in. If you’re sure about what you’re offering the world, you could convince them to support your enterprise.
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