Tips to Find a Good Investor
The easiest and most accessible funding option for most people is an affluent relative or friend who could extend a loan for you to start your business and pay the start up expenses. Once the business is making money, the loan can be repaid and you can be running it independently.
Otherwise, various funding options can be accessed through a network of companies and individuals known as “venture capitalists”. Venture capital has started some of today’s largest computer, internet and alternative energy companies.
The first thing you will need is to put together a business plan.
Once you have a business plan that you feel confident presenting, you can research and approach venture capital companies or individuals. If you have something that they find interesting and a way for them to make a large amount of money, they will prepare the appropriate paperwork and begin to work with you on your project.
At this stage, the venture capitalist will extend what is known as “seed” money to get the company off of the ground. Seed money is often used to begin the manufacturing process in a production business but in your case, would involve setting up the website and servers to handle the traffic you might expect.
Once you sign up with a venture capitalist, they will basically own a large portion of your future profits, which is typically how they set up their contracts. Nevertheless, the venture capitalist is the one funding the business and basically taking most of the financial risk, for which they should be justly compensated.
By InvestorGuide Staff