Tips for Attracting Investors for Your Start-up Company Idea

Getting a business off the ground usually involves a large sum of startup capital. If you plan on attracting investors or borrowing money to get your business going then you need to be aware that no one is going to give you money if you do not demonstrate that you (1) have a solid idea, (2) have a business plan and (3) are willing to put your own assets at risk. If you can prove these three things then finding funding sources will be much easier to do.

Tip #1 - Develop Your Idea Before Approaching Funding Sources

The first rule of thumb for finding investors or lenders is to develop your idea fully before you start shopping your idea around. If your idea is not ready to be patented, then you are not ready to approach Capital Venturists.

Tip #2 - Know What Makes Your Product or Service Special

One component of getting a patent is that you can clearly identify what makes your product significantly different from all other products or services on the market. This knowledge will not only make qualifying for a protective patent easier to do, but it will also make finding a backer easier to do.

Tip #3 - Invest in a Quality Business Plan

The one funding tool that you do not want to skimp on when searching for a lender or a Capital Venturist is your business plan. Your business plan is going to outline how you plan to make your business a success, as well as how likely your business is to succeed. The information found within your business plan will help you to build a solid business and it will help to demonstrate to possible backers that you know what you are talking about, that you have evaluated the risks of starting a business and that you have the ability to run a business in the industry that you have chosen.

Tip #4 - Demonstrate That You Are Invested in Your Idea

A lot of people think that investors are just going to give them money because they have a good business idea. This is just not the case. In order to entice an investor you have to show that you are just as invested in the idea as they will be. To demonstrate this you will need to (1) put up some of your own money, (2) put up some other type of collateral, (3) stake your professional reputation on the idea or (4) show that you have already established a history for your business/product/service.

Reference

http://www.businessweek.com/smallbiz/content/sep2010/sb2010097_108105.htm