10 Ways to Know an Investor is Right Fit for Your Business

January 11, 2018


Have you been thinking to raise funds for your business?
While raising funds an entrepreneur must be careful to choose an investor, who is the right fit for your business. An entrepreneur must work with the investor for a long time, so its priority for them to know the potential of the investor. To receive funds, you know exactly how much you need and what you need to do to grow your business.
How can you find the right investor to invest in your company/startup?
Here are the 10 easy steps, an entrepreneur can follow to get funded by your ideal investor as quickly as possible

1 Create an Attractive Profile
Create an impressive online profile. Give a sneak peak of your company info, team members, and products or services. Share your profile with friends and professional acquaintances and be sure to request references from them. When more individuals follow your company, its visibility will increase.

2 List Out All the Potential Investors
The best first step is to identify all your potential investors. Search for them through online sources like LinkedIn, blogs and websites like angel.co. While searching for the investors, target those venture capitalists with the title managing director, founder, general partner etc. Check the crowdfunding sites those can connect you with these potential investors.

3 Tweak Your List
After listing out all the potential investors, now it’s to tweak the list of these investors. Select those who have the same company vision as your startup. Remember an investor is not just a person who funds you, but also a source of support with expertise. Therefore, it is always good to track previous investments further than just the types and amounts

4 Start Networking
Once the final list of compatible investors is ready, start networking. Approach those with similar networks and try to give them a simple introduction. Find someone who can introduce you to the investors, as most of the investors may get tons of request to meet.

5 Check for the Factors and Criteria that Investor Looks for
Make a list of all those factors and criteria that an investor will look for while during an investment. This list will guide you to determine which stage of your business the investor is willing to fund.

6 Make a Pitch
Create a plan, prepare and run the process formally. Planning a formal fundraising process is the best way to spur competition and maximize your chances of getting a worthwhile offer.
No matter how and where your pitch occurs, it should be carefully planned to appeal to the investors.

7 Check if the Investor is Active
Entrepreneurs must work with an investor who has made an investment within the last three months or in the recent times. This will be a good opportunity to rule out those investors who do not have sufficient funds.

8 Check if the Investor Understands Your Business
It is easy to work with an investor who understands your business model. While pitching out make sure you listen to investors queries and answer with patience. Make a note of investor's area of focus and current portfolio to assess how knowledgeable about your business and industry.

9 Expectations of the InvestorA well-reputed investor does a thorough research about your company’s work, reviews, analyses your present financial status. Research what investors are expecting and what they plan to do to increase the value of your business. Discuss expectations so both parties will have a brief of their future to derive the desired outcome from the investment.

10 Finally, Select the Best Fit
You will need to select after going through all these steps. Your decision should be based on who provides the best deal as well as what the investor brings to the table. make sure you have a lawyer, banker, advisor, mentor or someone else who has been through this process around that you can lean on for advice.
By following these steps, you can easily land your right Investor to your business to grow.
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