Video:How to Find Investors When Creating a Business

Transcript:How to Find Investors When Creating a Business

Hi I’m Jaclyn Mullen from JaclynMullenMedia.com and you are now watching About.com. Today we're going to be talking about how to find investors when creating your business. And I'm sure a lot of you are very excited. You've come up with this great business idea, you’ve been running it, and now you are ready to take it to the next step. You want to roll it out on a much larger scale, but that's going to consider some cash flow.

Know the Fundamentals of the Investment

An investor is a really, really great resource to help you get that liquidity, help you cover costs, and help you expand your operation. Now before finding an investor, there are some fundamental questions you do in fact want to answer: why should someone invest in you? How much do they need to invest? What is that investment going to cover? and What are they going to get in return for that investment?

Tap Into Alumni Associations for Investors

Now that you’ve nailed down the fundamentals I know what you're asking yourself - where are my investors? And don't worry I've got some tips for you today. So let's get started with College Alumni Associations. Just because you graduated from that university does not mean you should not keep in touch with that alumni group. As a matter of fact, many of those members may in fact have the deep pockets that you need to take your venture to the next level. So reach out, connect with them, and I'll let you in on a little secret - you might even be able to find them on LinkedIn.

Consult a Banker for Investor Referrals

Second thing, go to your banker. They are your trusted resource, and they know who has money within the community. Ask them for any tips or referrals. Another great resource for trying to find investors are industry specific tradeshows, workshops, organizations. Again most people in those industries know what your hang ups may be, and they might even know how their cash investment is going to help you take your business to the next level.

Be Open to All Investors

One other thing I recommend as well, everybody would love the top VC or the top angel investor, but chances are they are in Silicon Valley or New York so don't hesitate to find out who are the influenced of the influencers. So what do I mean by that? You can have your eyes set on the top dog for someday, but chances are that somebody that's following them and heeding their investment advice also has the potential to help you take your business to the next level.

Be Prepared to Pitch the Business

So let's talk about what happens when you find that investor. Well just because you found them doesn't mean they're sold on your idea! You're definitely going to have to pitch them. What do most investors want to see in the pitch process? Passion, scalability, a plan - clarifying what the investment is going to cover, and let's not forget they are investing for you in a reason - a return on their money. How is their investment going to make the money back and then some?

Which leads me to the last point about finding investors. It's true looking for investors is great, but rest assured an investor is also are going to want something in exchange for this investment. More often than not, what you're giving up is a percentage of ownership. I'm sure it will be well worth it when you are able to take your business to the next level.

This is Jaclyn Mullen signing off from About.com. Thanks for joining us today.