How to find investors is one crucial aspect that every business owner should understand and utilize.

A small business can grow into a large company by finding andattracting investorsand making essential connections inthe business world; a small business can scale and grow into a large company.

Finding investors is something even the most prominent business does, which is why a small business owner or startup needs to be great at this aspect.

Here are five ways to find investors as a small business or startup in 2022

Five ways to find investors

Friends And Family

One of the first people you should consider to get capital as a startup or small business is your friends and family. Many business owners overlook how much money they can garner from their friends and family.

So the number one place you want to look as a startup or small business for investors is your friends and family but be careful not to take this casually because you know these people.

First, you need to decide what exactly you want them to do. There is the option of getting loans from them or having them invest in your company.

Getting loans from them is easier because they are likely to give you a loan in a more advantageous condition than you can get from banks and other loaning institutions.

But if you want to get more money upfront, having them invest in your startup is theway to go. It would be best if you treated them like any regular investor by first selling your business idea to them and informing them of the amount of interest they can get by investing in your business.

N.B. A strained relationship is likely if yourbusiness or startup fails. You must be prepared to face this risk if you decide to get capital from family and friends.

Business Loans

If you are looking for investors, one of the best ways to try out is to procure business loans from banks or other loan establishments, which you can find through AngelMatch.

Your business needs to have some operational history to get loans from traditional banks. You also need to provide the bank with various financial information and extensive documentation about your business.

You can also get business loans through Angelmatch; it does not provide you with business loans but matches you to companies that can provide you with loans to boost your business. The best part is the numerous resources you can get to help launch your business, grow and manage your business, etc.

Crowdfunding

There are various crowdfunding platforms that you can utilize to get the capital you need for your startup. They give you access to a larger pool of potential customers, who can invest as little as $20 in your startup. It opens you up to a new set of clients and financing, but most crowdfunding platforms necessitate raising the entire target amount to receive the funds.

There are various types of crowdfunding platforms:

Donation-based crowdfunding

With donation-based crowdfunding, the funds gathered are donations. It is a great way to collect money for projects that benefit individuals, communities, etc.

Reward-based crowdfunding

Reward-based crowdfunding is a means of crowdfunding in which everyone who donates to the startup gets a reward in the future. Depending on the startup, these rewards could be a free service, free product, etc.

Debt-based crowdfunding

Peer-to-peer lending facilities do debt-based crowdfunding. They provide a list of potential businesses so people can loan a certain amount of money. Lenders will get their money back plus interest. They do not receive shares from the company.

Private Investors

Private investors are also a great option if you want to find investors. They are investors constantly searching for various businesses to invest in exchange for equity. Two major types of private investors are Angel Investors and Venture capitalists.

Let’s examine the different types of private investors:

Angel Investors

Angel investors are investors who invest in a company at the start of the company. They usually invest their capital in the company, automatically granting them company shares.

Angel Investors have many resources and funds and only invest in promising startup companies.

Angel investors don’t just invest in anything. Just one Angel investor is enough to kickstart your startup; this is why you need a profitable business that will yield very high returns to catch their interest.

Venture Capitalist

Venture capitalists are needed when you plan to expand your business or divert into a more profitable but risky venture.

A venture capitalist provides your business with the capital it requires in return for various benefits. These benefits range from a percent of your business’s future profit, equity stake, etc.

The money venture capitalists invest in companies is usually higher than the one Angel investors invest. So venture capitalists only go for businesses with very high growth potential.

Venture capitalists get very high ROI and a share in your business once they invest.

LinkedIn (to contact like-minded businesses)

LinkedIn is an excellent tool for any startup looking to attract investors. It is a cost-efficient platform where you can discover or be discovered by investors.

You can attract investors through your posts, comments, and contributions and discover and approach high-quality investors.

It is an excellent tool for cold messaging or seeking quality connections. Your LinkedIn page can also serve as a great social proof with skeptical investors like Venture Capitalists.

Summary

There are five ways to find investors and get capital for your small business or startup. They include Friends and Family, Business loans, Crowdfunding, Private investors, and LinkedIn (to contact like-minded companies).

Regardless of whichever you decide to find investors, it is important to not settle for less and always get the best you can out of every deal. In the end, it is essential that both you and the investor benefit from the business.

At AngelMatch, we provide you with a list of thousands of Angel investors and Venture capitalists interested in your business in a few seconds.