Be Careful While Looking for Investors
Investment plays a vital role in the growth of any business or company. All the start-ups, ventures and businesses need funds at some or other stage of their development. Capital is one of the key inputs in any business. Those, who are looking for investors, should consider angel investors and venture capital as the last options for fundraising because as investors they take a significant proportion of your company?s equity and get the opportunities to exercise indirect and often direct control and influence over your decisions. They play a major role in addressing issues, arising from financial urgencies and requirements of the company. They not only invest a major amount of capital in firms but also put-in their time and experience, and play the role of an advisor or consultant for the company.
Searching the right investor for a venture is further a big deal. Firstly, you need to analyse and make your mind up about what type of investor is best suited for your enterprise that can provide funds on reasonable terms, taking the least amount of your company?s equity. If you are looking for investors for a big amount of capital, then venture capital firms are the ones you should look for, as angel investors are rather modest in investing, as compared to venture capitalists. Venture capital provides funds and also offers value added services like mentoring, alliances and facilitate exit. They help you in running your firm successfully with their invaluable source of information, resources and contacts. They seek to comprehend their investment in a company in three to five years.
But like every good thing, VCs also have some disadvantages. An entrepreneur should go for venture capital only if his business plan is able to provide liquidity in given time otherwise venture capital may not be appropriate. Another disadvantage is that securing any deal with them is a long and complex course of action, including a lot of paper work too. For illustrating a business plan and financial projections, you may need to hire a professional. You should be prepared for being in greater scrutiny in compliance to your duties and responsibilities towards your venture. You will have to provide a regular progress report of your company?s advancement. You may feel financial pressure in organizing finance for legal and accounting fees, payable at deal negotiable stage, regardless of success or failure of your funding deal. Considering all these factors, only an entrepreneur can decide whether giving up a part of their ownership in return of the funds from VCs, is a cost-effective deal or not.
Most early stage start-ups need small amount of money, for which angel investor funding is best suited. An angel investor can provide that fund without pooling from other sources, unlike venture capital. Angel investors business deals are often more flexible and negotiable as they invest their own money. Due to their informal investment criteria, angel investors are an excellent source of capital. Other than capital, angel investors can also provide much needed support, expertise and contacts from their own entrepreneurial experience and successful leaderships. But angel investment also has some limitations like possible denial of follow-on investment, deceptiveness of investors, lack of national recognition etc. So a good amount of research and analysis is required if you are looking for investors.
Looking for investors:- Post Funding Requests for Ventures or Investment Prospects and Find Investors, Venture Capitalists, Private Investors, investors group, Property Investors Start-Up