Published December 2, 2009

Finding the Right Investor

Most small businesses begin with a little financial help - which means that small business owners must find the right investor. However, how do you find the right investor when your business is too small or not right for venture capital, but too big to get by on a shoestring budget?

Prepare Your Business Plan

Your investor search may take you right to your own family or far and wide. However, regardless of where you find good investors, you must have a finished business plan. A business plan is the main tool that you will show investors how your business idea will work, who will run your business, how you plan to market it, and creates a realistic expectation of income and expenses. Without this tool, investors will simply nod say, "good luck." Be sure you spend plenty of time authoring, editing, and making the business plan presentable.

Choose Family Investors

Many small businesses get started with the help from family funds. It may take only a few hundred dollars from all your siblings and parents, or perhaps you have a wealthy uncle who is willing to take a chance on your business idea. You can always start with family first when you look for investors. No one believes in your ideas and abilities more than family.

Look For the Right Investor Online

You may not need to leave the comfort of your living room in your search for the right investor. There are plenty of online resources you can use to conduct a search for good investors looking to lend money in a viable business opportunity. Online sites such as Go4Funding.com offer a platform where entrepreneurs and investors can get together to make business happen. You can browse ads and profiles of investors who state their investment goals, or place your own profile in hopes that the right investor will find you.

Find an Angel Investor

While venture capital firms are looking to invest millions of dollars for big business ideas and a potential IPO, angel investors are private, usually affluent individuals who want to provide capital for smaller startups. Why? Smart investors know that they can make their money work for them in other places than the stock market or real estate. Thus, they use a portion of their wealth to invest in bigger opportunities with larger payouts.

Angle investors may not be easy to find. They usually don't advertise in papers and magazines. To find a good angel investor, start by asking your professional advisors such as your attorney, accountant, or financial advisor. You might ask other successful startups where they found their angel investor. With aggressive networking, an entrepreneur can get a few good leads on potential angel investors and schedule presentations.

Your entrepreneurial spirit will be the key to facing the people who have capital to invest. Make sure you are prepared. Then don't be afraid to ask everyone - friends, family, professional contacts. The persistent entrepreneur will find the right investor.