Eight tips on attracting investment for your business

Eight tips on attracting investment for your business

December 13, 2012 by Warren Knight

Eight tips on attracting investment for your business/investment wordHaving your own business is difficult but going through the investment route makes things a lot more difficult. Here are my eight tips for getting investment into a business.

1. Do your research

When looking for investment, you will need to do your research. If you haven’t looked into potential investment organisations, such as LBA (London Business Angels), I suggest you do immediately. There are also a lot of ways to help secure investment, such as going through the Seed Enterprise Investment Scheme, which is what I did. 

2. Have a great business plan

You won’t find investment for your business if your business plan is flawed. It is worth spending time and money on getting your plan right before approaching investors. The last thing you want is to build negative awareness before even securing any investment. 

3. Be transparent

When approaching Investors, you need to be transparent. There is no point going in there and avoiding difficult questions, they will see this as a weakness. If you don’t have the answer, tell them that, but also say you will be able to give them one. When answering negatively, give them a positive to work off, too. 

4. Be realistic

Going back to the business plan, predicting your business worth at £1bn after two years isn’t going to appeal to investors. They will see this as overly optimistic and unrealistic. Give them numbers you can deliver.

5. Look at your team

One of the reasons why Gloople received investment is because we have a solid team. We have our whole team in-house and outside mentors who offer sound advice when needed. The investors need to see that your business has stability – which should include having a good accountant and lawyer.

6. Be prepared to negotiate

Going down the investment route, you need to be willing to change your outlook on your business. Take Dragons’ Den for instance; entrepreneurs go in looking for £150,000 but want to give away only 5% of their business. If they are lucky enough to get an offer, it, without a doubt it will be at a higher percentage than the business owner initially wanted to give away. This is an extreme case, because it is a TV programme, but you will have some hard decisions to make when negotiating with investors 

7. Listen

You will find that some investors have a lot to say. You will need to sit there and listen. It is a great quality to have and will be looked at as an advantage when an investor feels their views are being taken onboard.

8. Risk over reward

An investor will be putting their hard-earned cash into your business, which is a huge risk. Make sure this risk is worth the reward. They will need to be able to see that their investment is being used to benefit the business. 

I hope my eight tips will help you find investment for your business. I would love to hear about any investment success you may have had.

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