Tips to Find a Good
Investor
I came up with a great idea for a website business
and need some money to get it off the ground. Could you please tell me how do
you find investors?
The easiest and most accessible funding option for
most people is an affluent relative or friend who could extend a loan for you
to start your business and pay the start up expenses. Once the business is
making money, the loan can be repaid and you can be running it independently.
Otherwise, various funding options can be accessed
through a network of companies and individuals known as “venture capitalists”.
Venture capital has started some of today’s largest computer, internet and
alternative energy companies.
The first thing you will need is to put together a
business plan. The business plan should look as professional as possible and
detail every aspect of your idea and how the internet business you propose will
make revenue.
Once you have a business plan that you feel
confident presenting, you can research and approach venture capital companies
or individuals. If you have something that they find interesting and a way for
them to make a large amount of money, they will prepare the appropriate
paperwork and begin to work with you on your project.
At this stage, the venture capitalist will extend
what is known as “seed” money to get the company off of the ground. Seed money
is often used to begin the manufacturing process in a production business but
in your case, would involve setting up the website and servers to handle the
traffic you might expect.
Once you sign up with a venture capitalist, they
will basically own a large portion of your future profits, which is typically
how they set up their contracts. Nevertheless, the venture capitalist is the
one funding the business and basically taking most of the financial risk, for
which they should be justly compensated.