First, let us say congratulations! We’ve all had that great business idea, the one little niche we know we could fill if we just had the resources, or the capital. But to get to the point where you seriously consider investment options takes hard work, dedication, and more than a few sleepless nights. So, at RDI we’d thought we’d share this pearl of wisdom with you: your next step is crucial in the make or break of your business. Yes, that’s right, finding a good investor opportunity can either sink or swim your idea in a matter of months.
So, how can you spot a good investor from a bad one? And, how can you guarantee what they promise you will come to pass? At RDI we’ve brought you our top tips on how to find a good investor, to help you shine a light in the dark and eerie world of investment.
First, understand your options
There’s three main types of investment. You won’t find a good investor if you don’t understand which type of investment you’re on the hunt for. These include:
- Private equity, sometimes shortened to PE. This umbrella term is used for a variety of different investment types made by private individuals or institutions. Often, they purchase your whole company, or make a private lump-sum donation or fund a single project within your business.
- Venture capital, sometimes shortened to VC. This type of investment is best if your investor thinks your idea has the potential for large growth. They’ll often also help you with your business plan and expertise.
- Angel investors. Angel investors are individuals who have a high net worth that operate on the venture capitalist model! Difference is, they do this in smaller amounts, to businesses they believe in. They’ll often help mentor you through your business development with their previous knowledge of company ownership.
Your pitch has the potential to be the most important hour or so of your life. So of course, you’ll have rehearsed it till it’s so ingrained you could recite it in your sleep. You can find a whole heap of pitch advice online, but whilst you prepare one, be mindful that it has to be honest. After all, you need an investor who believes in your idea as much as you do, and, crucially, you’ll need to be able to work with this person. Make sure your pitch packs a punch, but also be sure to include a whole heap of your personality. If you find you and your potential talk across wires, then it might be best to look elsewhere.
Last but not least, be sure to research your investor’s track record. Check out other projects they’ve already invested in and see how well they’ve done. This benefits you in a number of ways; one – it gives you an idea of how potentially successful your idea can become, and two – it shows you what else your investor has taken on and will alert you to any conflicts of interest. If you see success in other areas, and that your idea doesn’t overlap – you may have found yourself a good investor.
Need a good investor? Why not check out Raj Dhonota Investments? An Angel Investor with a sense of business as unique as the founder himself. RDI work with people to establish holistic development; and turn ideas into businesses through investment, mentoring and our own unique philosophy. You’ll soon wonder where we’ve been all your life!
Disclaimer – Although we always endeavour to deliver accurate and insightful information, if you are seeking medical or legal advice, please speak to a professional. All opinions within this blog are the writer’s, should you identify content that is incorrect, please get in contact.