It is difficult for a novice entrepreneur to organize his own business, since starting even a small business requires significant financial investments. Where can I get this money? The fastest and most reasonable way is to attract an investor - a person who will contribute his capital in exchange for part of the profit or shares. An investor can become a partner of a company, and often an assistant in development, because he is no less interested in the business generating income than the owner.
Where can a businessman get money to develop his business?
Until the business begins to generate income, not a single day will pass - all this time the entrepreneur spends funds on rent, paperwork, payment of wages, purchase of equipment, consumables, products and for other purposes. You can get start-up capital from several sources:
- Personal savings is a long, but most reliable way, in which you need to set aside a portion of your income every month;
- Bank loan – they are reluctant to provide money to start a business, requiring collateral, so more often entrepreneurs take out consumer loans, but the amount is limited;
- Borrowing money from relatives is a good method if you have a wealthy loved one who is ready to borrow a large amount;
- Search for an investor - an individual, a company, an association of people, it can also be business angels - specialists in investing in start-up entrepreneurs;
- Finding a partner - in this case, the business will have to be divided in proportion to the amount of investment; it is better to look for a financially literate person, not a beginner;
- Starting a related business - for example, if you want to open a car service service, you can start with tire fitting, and when you have profit and experience, expand your business;
- Receiving a subsidy from the state - provided by the employment center, district administration, business support department, but the amount of injection is small, reporting is required;
- Crowdfunding is the collection of funds through a special platform from ordinary people, but for this you need to propose an unusual business idea, interest the audience, and conduct an advertising campaign.
Experts and experienced businessmen are sure: borrowing money or resorting to credit is not the best idea for an entrepreneur. It is better to use your savings or attract investors by concluding a cooperation agreement with them.
Step-by-step instructions on how to attract an investor?
Beginner entrepreneurs don’t understand how to find an investor for a small business from scratch? To attract capital to develop your business, you need to draw up a well-thought-out business plan, choose a convenient form of cooperation, find professionals, negotiate and conclude a cooperation agreement.
How to prepare a business project?
A business plan is business card entrepreneur, it is this project that potential investors will study, assessing the attractiveness of financial investments. Please note that the investor is not interested in how original the idea is, what prospects it promises for you personally, he wants to know what profit he can get. The business project must contain:
- short and detailed description ideas, plans for its implementation;
- calculation starting capital;
- analysis of real benefits for the investor - also with calculations and reasonable conclusions;
- the payback period during which the income will be received;
- investment prospects.
If a business plan is written by a beginner, he may allow typical mistakes due to inexperience, which will scare off investors, sometimes it is better to invite specialists to prepare documents or ask for help from familiar businessmen.
How to choose the appropriate form of cooperation?
The form of cooperation is chosen by the businessman together with the investor, but first it is worth calculating the benefits of each model and determining the most effective way of interaction. An investor can earn income in several ways:
- percentage of the deposited amount, as with lending;
- part of the profit from the implementation of the idea;
- share in the business – re-registration of ownership rights will be required;
- finished products or services - relevant for investors involved in a related industry, for example, if a businessman opens a company for the delivery of motor oils, and the investor has his own auto parts store.
During negotiations, an investor may insist on a different scheme of cooperation; it is often more profitable for an entrepreneur to make concessions than to lose the opportunity to receive Money.
How to turn to experienced businessmen for help?
It is difficult to independently develop your business and look for investors without experience. It is better to ask for help from other businessmen who will provide assistance if cooperation is possible between you on favorable terms in the future. Who to contact? For example:
- if you produce food products, contact store owners;
- if you plan to carry out transportation - to businessmen who rent out cars or need regular cargo delivery;
- if you want to open a flower kiosk, go to flower suppliers;
- you are going to sell farm products to the owners of private household plots.
Experienced businessmen will advise you on the pitfalls and features of the chosen industry, help you study this issue more closely and prepare a detailed business project.
How to negotiate?
The first meeting with an investor is always a presentation of the project, presentation of the business plan and coverage of the main issues that may arise. You need to carefully prepare for the meeting so that the investor understands several points:
- you have financial literacy;
- have excellent command of the topic;
- offer a fresh and interesting idea;
- the investor will be able to make a profitable investment;
- there is no doubt about the honesty of the businessman and the reality of the project;
- what risks exist in this industry.
During negotiations, the emphasis should be placed not on how new the business will be, but on outlining the benefits of investing.
How to conclude a cooperation agreement with an investor?
When an investor is found, the project is presented, consent is obtained, all that remains is to prepare an agreement on the investment of capital. In this matter, it is better to involve a lawyer and check that the document contains the following:
- terms of investment;
- payment method;
- the amount the investor contributes;
- rights and obligations of the parties;
- procedure for action in case of violations.
The money received from the investor must be used only for business development - this is directly stated in the contract.
How to interest investors in a business plan?
- collect information about the investor, eliminating possible misunderstandings;
- carefully calculate the amount of investment that is needed;
- do not delay the implementation of the project;
- outline specific goals;
- analyze the market, competitors, and the situation in the industry so that the investor understands that you have worked on this topic well;
- do not hide important information and facts from the investor.
Of course, a businessman wants to present his project in the most favorable light, so data is often embellished and calculations turn out to be overly optimistic. An experienced investor will definitely ask about the fate of the project in the event of negative developments; you need to be prepared for this question.
Finding an investor is not so easy, because the number of business projects created every day is only growing, and the level of competition for raised funds is increasing. To find an investor, you need to approach your search wisely, following these tips:
- Start your search as early as possible, as this process can take several months. You need to look for an investor after you have calculated the prospects of the business and assessed the benefits of implementing the idea. The main mistake of newcomers: they use their funds for development, and when the capital runs out, business goes into decline, they begin to look for injections from outside, but such a project most often turns out to be uninteresting for investors;
- Contact someone who can really help. If the investor is large, it is not worth going to him, offering to invest in a small business, but if it is a small company, then it simply will not have enough capital to invest;
- Name the specific amount that is needed - there is no need to indicate a range, for example, from 500 to 900 thousand rubles, the number should be accurate, and the spread should be minimal.
An experienced investor knows that it is better to invest in projects with balanced income and risk. The goals of an entrepreneur must be specific, and the idea itself must be relevant, allowing for profit in the future.
How to find an investor - review of specialized sites
In the era of Internet development, it is impossible to imagine searching for investors without the use of remote technologies. For this purpose, there are special platforms where businessmen can “meet” and come to an agreement with potential investors. The following platforms are popular in Russia:
- Boomstarter is a crowdfunding platform focused on raising finance for the implementation of creative projects;
- Planeta.ru – allows you to find an investor and implement socially significant, creative ideas; about 800 thousand people are registered on the portal;
- Nachinanie.ru is a platform for collective financing of projects - religious, educational, socially significant;
- Eastwestgroup – here the investor search services are paid, but the assessment of a business project is carried out free of charge, the company has been professionally attracting investments for over 10 years;
- Start2Up is a message board for investors and aspiring entrepreneurs; projects in the fields of the Internet, education, art, and culture are popular.
Finding an investor to develop your business is not an easy task, but it is a feasible task with the right approach. The main thing is to propose a relevant idea, draw up a well-thought-out business plan, and accurately calculate the benefits of investments. A potential investor will be interested in an honest project with low risks, a sufficient amount of income during the implementation process, and also with a financially literate owner.
This section reflects requests from potential investors considering the opportunity participation in an investment project on the territory of the Moscow region.
You can do searching for investment projects by placing a corresponding request in free form in our investment projects database.
Entrepreneurs who are ready to offer their investment project for consideration will be able to find your request using keywords.
You can also familiarize yourself with those already proposed for implementation investment projects in the Moscow region, going to the section “I offer an investment project”.
Sort by date by price
We know how to attract investment in your projects.
We help our clients solve their most pressing problems financial questions related to the financing of any business projects. Feel free to get in touch if you lack financial resources to implement your projects. A dedicated team is ready to provide investment solutions by connecting you with potential investors.
WhatsApp only: + 7-926-745-72-17
https://investconnect.populiser.com
Investment capital is available for projects in the real sector of the economy and trade (export-import), socially significant initiatives in the field of ecology and healthcare, culture, education, and tourism.
We have reliable connections with foreign financial institutions interested in projects in the territory Russian Federation and CIS countries, providing capital on favorable terms under a simplified procedure, both in the form of an investment loan and in the form of creating joint ventures with the share participation of a financial partner up to 100% of the project cost.
Capital is provided at a rate not exceeding global rates (3-4% per annum), with a moratorium for the period of development of investment capital (up to 3 years).
Time frame for organizing financing, depending on the degree of readiness project documentation, 1.5-2 months.
Direct contacts with persons making decisions on the provision of capital reduce the time required for document flow and minimize the risks of refusal of financing.
We provide project support at all stages of the transaction, from placing an application for project financing to organizing and holding a working meeting to sign an investment contract.
Applications for the provision of services are accepted from new (created for the project) or existing companies that have objective grounds for receiving investment capital, have realistic plans for the implementation of the project, owning the initial capital to cover the expenses of the organizational period, at least USD / EUR 50-70,000.
Please send questions and suggestions to the following email address: [email protected], for negotiations skype: a.rishad1, mobile phone, WhatsApp, Viber + 79273369267
For a business that has existed for more than 2 years and has a stable turnover, we offer loans from private investors through investment platforms. Loan terms are up to 12 months, the approximate rate, taking into account platform commissions, is 32-35% per year. The loan amount is comparable to the monthly turnover (up to 10 million rubles); if equipment is pledged, the amount can be increased. For medium-sized businesses, unsecured loans can be issued through factoring, overdraft, bond loans (the amounts are limited only by the financial capabilities of your company). We work throughout Russia, except the Caucasus, Crimea and the Far East.
Large-scale modernization of production, development of the agro-industrial complex (pig farms, poultry farms, cattle complexes, recirculation systems), obtain the latest equipment and technologies of the 21st century, expand capacity, purchase equipment, build multi-storey buildings, new workshops or entire turnkey plants (from 5 million euros ).
The investment project itself can be considered as the main collateral for the loan.
We work in Russia and the CIS (except Ukraine).
Investments and loans in real sector projects
We are considering projects from the real sector: manufacturing, energy, agriculture, construction of transport and logistics complexes and others.
Mostly projects from 0.1 to 1.5 billion rubles are interesting. We can consider larger ones.
The project's profitability is from 20% per annum in rubles and above.
We provide assistance in attracting financing for business projects in the field of oil refining.
Funding volume from $100M - $20B+
Duration of the investment project: 5-15 years, depending on the investment program.
Return level >25% (IRR).
For the purposes of purity and openness of business, projects accepted for consideration of financing issues are preferably existing businesses, at least three years on the market, without mixing investments of several financial institutions. We also take on the functions of Project consulting & Credit broker & Financial provider. Financing of Start-Up projects is possible.
We invite initiators of large investment projects (manufacturing, high technology, pharmaceuticals, ecology, energy...) based on existing enterprises that need their financing, to strategic cooperation!
Loans up to 10 years from one of the largest Russian banks.
To start interacting:
-financial model, business plan. It is advisable to have outside income to repay the loan (not necessary. Each project is individual, there are no special conditions)
We are also ready to organize lending secured by commercial properties with an operating rental business
The bank analyzes the financial flows generated by commercial real estate. 30-40% discount on deposit.
Loan terms are up to 10 years. Rate 11-12.5% (currently)
Amounts from 300,000,000 rubles are considered
Terms of cooperation in personal correspondence with interested parties.
Please first send your requests by email: [email protected]
Projects in any area of activity are accepted for consideration, incl. financing long-term commercial transactions.
Loan for a period of 5-10 years, at 4% per annum, moratorium on interest and loan payments for 12-24 months
The organizational period is 2-3 months, we provide consulting support on a paid basis.
Details when contacting the client.
Our company "Capital Plus" offers direct investments and preferential loans for business.
Among our partners are leading Russian and foreign investment companies, AAA-rated funds.
Basic financing conditions:
Projects from the real sector of the economy are being considered.
Security - the investor's entry into share capital for a period of 3 to 5 years. Exit from projects is carried out by selling a share to a strategic partner (initiator) or through an IPO.
Having a profitable and financially stable business with growth potential, a strong management team, and a transparent ownership structure. The company is at the "Development" or "Expansion" stage. The minimum transaction amount is 300 million rubles.
For start-ups and enterprises with low turnover, investment loans are possible, subject to the participation of the initiator or his financial partner in the project, with his own funds in the amount of at least 20% of the project cost.
The loan term is up to 10 years or more, the moratorium on loan payments is 1-1.5 years. The minimum amount is 100 million rubles. Any industries and segments are considered.
We also provide preferential leasing financing. As part of government subsidies - significant discounts on advance payment + manufacturer's discount.
For small businesses and individuals, we offer loans secured by any real estate (residential and commercial), as well as vehicles, special equipment, including secured by purchased real estate and equipment. The loan amount is from 2 to 30 million rubles.
— subscription to underwear. If you are also thinking about developing your startup or launching something from scratch, then our experience will certainly be useful to you.
We spent some of our own money on the project to test the viability of the idea, but there were no longer enough funds to grow and test serious marketing hypotheses. Then we started looking for investment and found it.
“Trusbox” is not a pure technology service, but it definitely has the potential for development in the direction of IT, so this is exactly what we were looking for for investments. Technological projects often require lengthy and complex development, and the result is measured not only by the kind of metrics that we are accustomed to based on university economics lessons 10 years ago. So if you want to open a beauty salon or a car repair shop, then my advice, unfortunately, will not work for you. But if you come up with a program that makes the work of a car repair shop easier, you can find investments in the project, following our experience.
Anna Gorodetskaya
My documents: what needs to be prepared
At the first stage of a project, it is often recommended to draw up a lot of documents: a description of the concept, mission, necessary regulations - that is, materials without which new team members will have difficulty understanding what your project is about. It’s not a fact that you will definitely need all the files later in your work, but they will definitely come in handy when you draw up key documents for investors.
- Detailed presentation of the project
You must have a ready document from which a person who has no idea about the scope of your project will understand what you are doing, for whom and how. The document answers the usual questions: what we do, for whom we do it, how we do it, who we are, what are our plans, who are our competitors. If you, like me, are put into a work stupor by open empty files, then use the presentation template on canva.com - they already have structured templates with a minimal design and icons that you can use to visualize processes and numbers. - Project business plan
Even if you haven't made a single sale yet, you should still have an idea of where the money is in your project, even if it's small and not soon. But if your project, in principle, does not involve making money, then perhaps it belongs to the social or art sphere, and sponsors, rather than investors, will help you better. - Road map
A document that will describe what, when and with what forces you plan to achieve. It should consist of several milestones and describe the processes and resources that will help you get there.
LinkedIn Sales Navigator/Unsplash
Where am I: determine the stage of the project
To choose the right potential investor and project presentation strategy, you first need to decide what you have. There is a simple classification for projects in the first stages of development.
- Pre-seed— you have an idea, a team, a working prototype, hypotheses about the audience and sales channels, confirmed by small numbers. That is, you have a project in which there are some people, and the project is working confidently, albeit at low speed.
- Seed- you bypassed all the pitfalls of the previous stage, did not go crazy, did not leave for Nepal, and are now ready to grow sharply and strongly.
Your strategy for finding an investor will depend on what stage your project is at: some funds may specialize in projects at different stages. When you apply to a specific fund, you will need to indicate what your current project status is.
If your stage is a confident pre-seed and you have not yet released, in fact, anything, this does not mean that you will not be able to find an investor. The first option of finding an investor will not require you to have a finished product.
About the benefits of hackathons
If you have a team of developers, even a small one, then be sure to participate in thematic or corporate hackathons. A hackathon is a short-term event (most often held over a weekend) in which teams or individual developers solve one problem voiced by the organizer. In addition to possibly winning an impressive prize that can be used to develop the project, you will meet serious people in your industry.
Companies that hold hackathons are obviously interested in additional products; if they like your project, you have a serious chance of attracting hackathon organizers as investors, as was the case with three teams at once at the “Build a University” hackathon. You can view a list of upcoming hackathons.
If a hackathon is not suitable for you, then nothing prevents you from contacting the investor directly, because thanks to the documents that you have already prepared, you know how much investment you need (although this point will be discussed).
QIWI Universe/facebook
Where to look
1. Follow the trail
If your product is definitely something tech (medtech, fintech, etc.) and it solves a clear problem, then look to the big companies in your sector, many of them have their own investment solutions. For example, QIWI has a separate platform through which you can contact the company with a request for investment.
2. Spying on our neighbors
If you carefully and carefully prepared the presentation of your project, then you probably know all the competitive startups in your industry. Information about transactions is a major information feed that is very rarely hidden. You can check online to see if your competitors have received investment for Last year, and if so, from whom. Feel free to contact funds that have invested in projects similar to yours: this means that the fund is already working with your topic, understands something about it and will be able to evaluate your project for subsequent investment.
3. Contact directly
The simplest and most obvious advice, which for some reason no one uses: just write to investment funds. The Firrma website has a ranking of the most active (that is, those who conducted the most transactions) venture funds for the year. There are both seed and new funds. The algorithm in this case is as follows: you need to go to the investment fund’s website, try to find a project presentation template there, fill it out and send it, along with a covering letter, to the address indicated on the website. Investment funds actually read the letters they receive. They make money from investments and, of course, do not want to miss out on interesting options.
I strongly recommend finding a presentation template for a specific fund and working with it, because in any case you will be asked to provide information in a standard form, and you will simply lose time and some credibility if you do not use a document that is in the public domain.
cartierawards/instagram
One of the formats for reaching investments is startup competitions. Most often, an investment fund and a large company are combined to organize them, and the winners receive prizes from both: in the form of investments, in the form of the company’s services, or both. For example, the “First Height” competition is held jointly by the consulting giant McKinsey & Company and the large investment fund Winter Capital. But the most famous startup competition in Russia is GenerationS. In addition to the main competition, every year there are different nominations, the process of application and expert verification in them can be simpler, so check if there is a special nomination this year on the topic of your project, and if there is, then feel free to apply on the website (list of special nominations located at the bottom of the main page of the site).
Pay special attention to competitions that stimulate the development of women's entrepreneurship. Thus, the famous jewelry house Cartier has a competition program for women business leaders from all over the world.
By the way, it’s not just Cartier that has separate women’s acceleration and investment projects. Read more about the special opportunities in IT for Pink women.
Investor's choice
An important and responsible matter. Because an investor gives you not only money - he gives you connections and the opportunity to make this money even more money.
In addition, investment money is not given for nothing - you can only receive it in exchange for a share in the company. That is, having allowed another participant into your project, whose interests will definitely be exclusively commercial, you must be prepared for the fact that your actions as a project manager must also take into account the possible benefits for the investor.
This is the main difference between investment and lending: the loan can simply be returned and forgotten, and the investor will remain with you until he leaves the project (sells his share). So if your project involves a relatively simple development cycle and does not require a lot of funds, then it will probably be easier and faster for you to take out a loan for business development, and only then attract larger investments to scale the project.
Whichever option you choose, I wish you good luck and courage: no matter the outcome of your investment hunt, the experience of communicating with funds and making presentations will remain with you forever.
Where to find an investor to open a business and to develop an existing project, how to prepare for a meeting with potential partners - the answers to these and other questions are in the article. As well as samples of business plans that will be useful for finding an investor.
In this article you will learn:
Finding an investor in a bank
Where to find an investor for an existing business or for a new project? The first thing that comes to mind is a bank. Probably every second resident of our country regularly calls banks and happily informs them that they have been approved for a loan from 50 thousand to 50 million rubles. For example, a certain bank approved me a loan of 5 million at 11.8% per annum. However, upon closer examination, it turns out that the rate increases: without insurance - by 5.1%, without advance payment - by 2%, without collateral - by 2.1%, without online application - by 0.5%. From the date of loan issuance to the date of the first payment, the rate increases by 1.5% per month. The maximum total cost of the loan is 24.103%. No, thanks!
However, if you search in different banks, you can get a loan at about 11%.
In addition, you can involve your friends or subordinates in co-financing. They apply for a loan from a bank, you repay it, and you pay them a commission for using the loan. This scheme works, since few subordinates will dare to refuse the boss if they are confident in his enterprise.
This method also includes obtaining loans for small businesses from banks at 9.5% per annum secured by collateral (goods in circulation, equipment, transport, real estate, collateral of third parties, guarantee from the small business support fund). The only case when banks provide funds for opening a new business is franchise of famous brands(recipe for success).
To find an investor, you need a business plan!Download documents that will help you draw it up correctly, and sample business plans:
How to justify to a bank the effectiveness of an investment project using Excel
To prove to the bank that the company will be able to pay off its obligations, use a ready-made model in Excel to evaluate the effectiveness of investment activities as a whole or a separate investment project.
Funds and business angels
You can attract investor funds for a project from scratch or for its development in Russia directly, bypassing banks. For this, connections and acquaintances, recommendations, etc. are usually used. But there are more modern ways to attract attention - these are electronic investment platforms. For example, "City of Money".
The applicant places his proposal on this site: short description and financial calculations. Provides Required documents(founding documents, business plan, guarantees, if any, documents for the property that will be used as collateral. The portal’s specialists evaluate the borrower’s credit history, documents and the business itself: profitability, stability, equity, debts, etc. After that, they leave in place and evaluate everything live, because everything may be in order according to the papers. After that, they publish a proposal, which investors evaluate, usually within two weeks, ask clarifying questions and either finance the project or not. See also.
What is the advantage
Firstly, there can be many investors; accordingly, the possible losses of each of them are reduced, and they, unlike a bank, can take risks.
Secondly, they may evaluate the offer differently than the bank. If the project is attractive, then a reverse auction situation is created - when there are more people willing to invest money than necessary, then the interest rate on loans decreases. As a result, the loan is much cheaper than a bank loan. This is a better way to get investment for your business.
Third, investors, unlike a bank bound by rules, can take risks and provide funds without collateral. Here, the platform itself acts as a guarantor, which checks the borrower and his affairs. Therefore, through the platform, investors can allocate funds even to those who would not be allowed from the street even onto the threshold of their office.
And finally, fourthly, on the site you can place , without having any business yet, and if it seems attractive, they will “buy” it.
For its services, the site takes a commission of 3%, and if we're talking about about a startup, then the fixed payment is 4,000 rubles.
Investor proposals
There are also reverse platforms where investors themselves post their offers. For example, "Business platform" .
If you combine sentences from the first page, which indicate , then you get the following table:
Table 1. Investor proposals
|
Sum |
Percent |
Industry |
Terms (information from the site) |
|
Know-how, production, energy, agriculture, pharmaceuticals, biotechnology, polymer processing |
Feasibility study, business plan, team information |
||
|
Business financing through leaseback, real estate and shares, equipment, unfinished objects, or commercial real estate. |
We invite partners to cooperate with projects for the reconstruction and development of existing businesses |
||
|
New technological projects and startups through ICO (Initial Coin Offering) - by issuing new cryptocurrencies. |
The minimum participation with the customer’s own funds is from 20–30 thousand dollars, in this case you can remain 100% owner. The project must have a prototype, a working model, for an “idea” - we don’t work |
||
|
Construction |
Unfinished objects |
||
|
Private American business angels invest in any IT and Internet startups with high development potential |
Availability of a business plan in accordance with the UNIDO world standard:
|
||
|
Extraction and processing of raw materials, construction and real estate, any production and processing, any industry and energy, any services and trade |
Business stage: from scratch and existing enterprises. Investment volume from 10 to 500 million rubles. into one project. Payback period: up to 60 months. Availability of a business plan and a ready-made team. |
||
|
Mechanical engineering and metalworking, polymer processing, waste processing, petrochemicals, new materials, HoReCa |
A presentation containing general information about the team, analysis and forecasts of the market for a given product/service, key financial indicators, and a proposal to the investor. Financial model for the next 2–3 years. |
||
|
Any highly profitable projects |
We are looking for specialists who are charged with the idea of development, who do not have enough start-up capital and are ready to lead the direction. If the start is successful, the initiator receives the right to buy out the option after 3 years. Before this salary + % of profit |
||
|
Extraction and processing, agriculture, construction, manufacturing, trade, services and other industries |
No collateral or security for the project is required from the initiator. The initiator's own financial resources are not required. 100% of financing is provided by the investor. The investor assumes all risks |
||
|
Working projects in the field of production, wholesale/retail trade, real estate, construction, Internet technology, agricultural sector, finance. |
Investment schemes – equity participation in business (priority) or secured lending |
||
|
Medical industry (dentistry, diagnostics, MRI), accommodation, food services, tourism |
If the start is successful, the initiator receives the right to buy out the option after 3 years. Before this salary + % of profit |
||
|
Investments to buy or open a store |
Providing investments, sales assistance |
||
|
Manufacturing, service provision, trade, IT, |
Details from the investor |
||
|
Any industries and areas of business |
A clear business plan Brief information on the project initiator (education, work experience, contacts) and on the investment project (brief description indicating the main economic indicators) |
||
|
Automotive, architecture, woodworking, industrial parks, engineering, investment/finance, information Technology, mechanical engineering, medicine / pharmaceuticals, metalworking, real estate, oil refining / petrochemicals, know-how, transportation / transport / logistics, recreation, waste processing, polymer processing, industry, robotics, crop production, Agriculture, communications and communications, construction, energy |
Both individual trading companies and chain stores actively cooperate with us to obtain both short-term and long-term loans in order to increase working capital and increase commodity turnover. |
The table shows that the minimum investment amount starts from 1 million rubles. As a rule, a deposit is not required, but it is necessary that the initiator himself develops his business, i.e., first of all, businessmen evaluate the business and personal qualities of the applicant himself. As for industries, the majority invest in innovative and IT technologies, or in classic business areas.
If we look at the generalized diagram, we will see that the larger the loan amount, the higher the interest that the investor requires for it (see Figure 1). Although there are exceptions. For example, an American fund for 100 million rubles. asks for only 12% per annum, and our businessman-builder 100% for 224 million rubles. (see table above).
Drawing
Raising money through various funds (venture funds, small business support, etc.) can be attributed to the same method. You can come to these funds in person, you can find them through online platforms, through acquaintances, etc., but the essence does not change.
You can get investments for your business from your suppliers
Several years ago, an acquaintance of mine set up a café-bar without a single ruble in his pocket; moreover, he was saddled with a substantial debt. In paying the rent, he agreed with the owner of the premises on a two-month deferment, since he needed time to develop himself. He also received a two-week grace period from the beer suppliers who installed the taps on the condition that only their beer be poured at the bar. It’s the same story with coffee - a coffee machine was installed for him, subject to a certain volume of beans purchased per month with payment at the end of each month. The same goes for suppliers of beer snacks, cakes, etc. The staff, of course, gets paid at the very end.
Thus, his bar started working and in the first month he was able to close the current payments, and by the end of the second he was able to pay the rent.
In other words, investments for small businesses can include not only cash, but also trade credit, deferred payment and other forms of in-kind lending. The most important advantage of this type of collateral is that it is much easier to find suppliers willing to provide a trade loan under exclusive conditions and will cost less than professional investors or banks.
For example, when a university publishing house needed funds to publish academic literature, they granted one of the large stationery companies the exclusive right to sell stationery products in all buildings of St. Petersburg State University. And thus, we received the necessary funding.
Grants
Another way to obtain funding is to participate in competitions and receive government and private grants. To do this, a business must have a social component or pretend that it has one.
For example, in St. Petersburg for several years there was a network of public pharmacies selling medicines at reduced prices due to state subsidies. The pharmacy positioned itself as social project and submitted the corresponding application for the state. help. In order to get it, she sold medicines to the population for six months at essentially wholesale prices. Due to low prices, the pharmacy gained popularity and made profits due to high turnover. As a result, the state the authorities had already heard about her, and she was easily able to win a grant for the social provision of medicines to the population.
This method seems specific, but in fact, any business can be presented as socially significant.
This category also includes numerous business incubators and small business assistance programs. Each specialized committee in government agencies has its own budget, which it needs to allocate in its own area: sports, youth, social affairs, healthcare, education, social housing, etc.
This also includes fundraising, crowdfunding, crowdsourcing and other methods of collecting donations from the public.
In general, finding money is quite difficult, but it is possible. The only question is that both the applicant himself and the investors are confident in the business being offered to him.
How to prepare for a meeting with investors
Before negotiations with potential partners:
- collect information about them;
- think about how to present data about the project;
- determine the forms of participation in the project;
- prepare documents for the meeting.
Pay attention to the scale and timing of past projects, forms and conditions of participation in them. Study the industry preferences of your potential partner. For example, venture capital companies are interested in innovative companies. Find out the minimum and maximum amounts of money invested, requirements for the level of profitability.
Determine what type of investors are strategic or financial investors. To draw conclusions, analyze information about the projects in which they have invested money. The former take part in the management of the company, the latter are only interested in income from investments. Using the information received, the financial director will assess in advance how much the company will interest potential investors and will place emphasis when preparing information.
What documents to prepare
Before meeting with investors, prepare the following documents:
- patents, licenses, documents confirming exclusive rights (if the project involves a high-tech or innovative product);
- commercial proposals or draft contracts for the purchase of equipment, real estate, and the creation of utilities. Describe the supplier, the reasons for choosing him and this equipment or real estate, cost, delivery conditions;
- loan agreements, if you have already attracted banks to finance the project. In the description, indicate the amount, interest rate, loan term, loan period, main covenants;
- draft agreement on participation in the project;
- loan agreement indicating the amount, interest rate, issuance and repayment schedules. This is relevant if the investor participates with money;
- a constituent agreement, a share purchase and sale agreement, a share purchase and sale agreement or a prospectus for an additional issue (in case of equity participation). In such agreements, fix the amount of investor participation, the procedure for depositing funds, the procedure for assessing the contributed share with assets, the procedure for participation in the management of the company, and the rules for distributing profits.
01Mar
Why do you need an investor?
We all understand perfectly well that initial stage creating a business is very expensive.
Moreover, regardless of the field of activity, for the most part the costs will be:
- To a suitable premises;
- For the necessary equipment;
- Looking for employees.
Then, depending on the specifics of the business, there will be other costs:
- Additional software;
- Repair of premises;
- Purchase of consumables;
- Etc.
And in most cases, the initial costs are so high that it becomes very difficult to pay them alone, or even as a team.
But in addition to the initial costs, many companies feel a lack of funds for full and harmonious development. There are often cases when a young team has enormous prospects - their goods or services become truly in demand on the market, but due to lack of finance they miss out on the lion's share of profits.
For example, they cannot hire additional employees, or purchase more equipment, or expand the premises, and so on. That's when they will need an investor in the existing business.
We draw a conclusion: companies need to search for investors at the initial stage of their development in order to cover the lion's share of the costs of implementing their business. This is the main and most important reason why many aspiring entrepreneurs are looking for free funds.
The second reason is the search for funds for the development, expansion and implementation of any new ideas. This is typical for those companies that found free funds to start, but for some reason do not have sufficient funds for development.
How to find an investor for a business from scratch
Before moving on to the practical part of finding an investor, you should decide on a couple of theoretical points. Knowing the investor’s desires, you can understand how to look for him and what you need to give him.
When looking for an investor, it is important to remember one detail:
Investing involves making a profit. Every businessman who wants to interest a potential investor in his business should keep this rule in mind. Nobody will be interested in “innovative breakthrough”, “ original idea", "new technologies" if they do not promise tangible profits. All investors need to be spoken in the language of money and risk. Only then can they really be interested.
Based on this rule, the following can be distinguished:
- To receive a cash investment, you need to convince the investor that his investment will be profitable;
- You need to prove why your project is more interesting than that of your direct competitors;
- Show what prospects you have for further development in the market.
Investors who do this professionally can literally determine in 10 minutes whether a project will be profitable or not. And when they invest money in business, they are not doing charity. The only motivation for investing is to get a quick profit, which should be higher not only than the average bank deposit, but also the lion's share of competitors.
It follows from this that the main task is not to find a private investor, but to interest him, convincing him to invest money in your project.
What information may be of interest to investors?
Now, based on an understanding of why people invest in the first place, you can begin to answer questions about what might be of interest to a potential investor.
But before that you need to understand one simple thing:
There is no need to perceive an investor for a business as a lender. He voluntarily invests his funds, and if he fails, they will not be returned to him in any way. That is why for beginning entrepreneurs, an experienced investor will be a partner who can help in case of minor failures and share success.
That is why you need to work not only for the benefit of yourself, but also of your business partner. You invest your ideas, effort, time, money (to a lesser extent), while the investor invests his money and participates in making important decisions for the company.
This is a kind of shareholder who has the right to vote, to whom they are obliged to listen, but do not always follow their lead. Maintaining a balance between the interests of the company and investors is very important.
So, you have found someone who is interested in investing in your company.
What you need to tell him about the business:
- The main idea of the business;
- Required amount of investment;
- Estimated profitability;
- Risks.
This is all that an investor will need to know at the beginning of your cooperation. When he evaluates the volume of the proposed investment, compares profitability and risks, and if he likes your idea, then the second stage will begin - a detailed survey about the business.
This is when you will have to reveal all the details: why your idea is better than your competitors; how are you going to spend the money and on what; when will the business expand, and to what extent; what guarantees can you give and other questions.
It should be understood that laying out all the trump cards at the beginning is not the best idea. It is quite possible that a person will not be interested in business in this area, or he may implement this idea himself.
Return for investor
In Russia there is an excellent indicator of profitability on bank deposits - the key rate of the Central Bank. By adding 2-3% to it, depending on the region, you can reach the average for deposits for individuals and legal entities with large amounts of money.
For an investor, this is the minimum rate of return that he can receive by simply depositing his money in a bank account. Consequently, a businessman must show a return at a distance higher than a bank deposit by 1.5-2 times. This is typical for small and medium-sized businesses. For a large one, income in the amount of a bank deposit is possible due to the scale and prospects for rapid expansion.
Let's summarize: The investor is primarily interested in the return on his own investments.
That is why the following parameters are analyzed before investing money:
- Prospects of the idea;
- Required amount of investment;
- Risks and profitability.
If these points satisfy both parties, then the further stage of negotiations proceeds, in which the investor tries to get the maximum detailed information about the business and assess its future prospects. A competent business plan can answer all the questions that may arise during negotiations, so its preparation is mandatory.
Where to look for an investor for a business or startup
We've sorted out the basic information about what you can tell an investor. Now about where you can find an investor.
Close people, friends, acquaintances
One of the most controversial ways to raise funds. Suitable for creating a small business by promising people you know a return on their investment when the business begins to generate income.
At the same time, among friends and acquaintances you can actually find like-minded people who may be interested in the idea, and create a whole team that will be able to share all financial losses and compensate for each other’s shortcomings.
You can borrow money from relatives to open your own business if you need a small amount and there are some guarantees of its return.
Funds
There are two types of funds that can help you find investment for your business: small business funds and . Regardless of the type, obtaining funds from such funds will be extremely difficult.
You need to get managers interested in your business. And if in other cases an innovative idea, an advantage over competitors and a quick payback can beat average or even low profitability, then in this case the return on investment comes first.
Investment funds are only interested in one thing – profitability. They are ready to invest their money at great risk in enterprises that will bring them great income. But if a businessman talks about a long-term investment without guaranteeing profit in the first few years, such a business is unlikely to be financed.
In order to evaluate the prospects of its own investments, the fund will need time and as much information as you can provide. A group of analysts will analyze it, so the more information, the higher the chances of receiving funds.
Investment funds - an association of many investors who invest free funds in order to make a profit.
Moreover, these investment funds often have less money at their disposal than several private investors who are also ready to invest their money in interesting ideas, if only someone is interested in them. But you should understand that applying for investments in an investment fund is much easier than applying to a private investor, because for the first you just need to contact the company, and in the second case, you need to somehow find contact with a very famous and rich person.
Government funds are one of the profitable options for receiving funds if the idea is truly innovative. Competitions are held periodically, the winners of which can receive a grant, for which entrepreneurs can realize all their ideas. Enlisting government support, if possible, is the best option.
Successful businessmen
One of the best and most profitable ways to find investments is to work with successful businessmen in a city or region. Regardless of the scale, in the region you can find many successful businessmen who have already followed this path, have profitable enterprises and free cash. It will be enough to interest them in your idea and your personality, and then they will invest their money in an interesting project.
At the same time, one of the clear advantages of working with successful businessmen is that they can teach and explain some of the moments that they themselves went through. Many entrepreneurs are happy to take beginners under their wing and explain to them how to cope with difficulties, minimize costs, and make a profit. Especially if the cooperation can bring benefits to both parties in the long run.
Cooperation usually takes place under two conditions:
- In the form of a loan;
- In the form of purchasing a share in a business.
The second option is preferable for both parties. It involves the participation of the investor in the development of the company, this makes it possible to avoid most mistakes and take advantage of the connections and relationships of a more influential person in order to establish your own.
If a businessman cannot help with finances, it is recommended to ask him which of the people he knows can help and be interested in the idea. Such a small psychological trick will allow you to learn about other businessmen, and with a recommendation from one of your colleagues you can count on something more.
A method that is suitable only for, and not in all areas. – financing of interesting projects by individuals. Often this is for some kind of reward. Leading companies that are developing some interesting new products for retail and wholesale are looking for free funds.
Banks
If all of the above methods of attracting investors do not work, you need to apply for loans from banks. Different credit organizations have different requirements for potential borrowers, but their essence is as follows:
Banks do not need maximum profitability. They are interested in stable receipt of funds and loan repayment. That is why credit institutions will study your business plan for stable income generation and, accordingly, return of funds. They are more interested in guarantees than profitability.
It is dangerous for an inexperienced entrepreneur to take out a loan from a bank, especially if it is quite risky. If the idea does not work out, the bank will make every effort to demand the return of funds, up to the sale of the borrower’s property.
That is why it is worth taking out loans for a small business, which will pay off in 4-5 months and can then generate income. And if it doesn’t work out, then the financial blow will not be as strong as the loss of money for the implementation of a medium or large project.
Venture investments
One of the most popular and effective ways attracting funds for business in innovative areas. Venture investments are investments of funds (associations of investors).
The nature of venture investments is their high risk. They provide funds to many companies that can change the world with their innovative ideas.
Venture funds can also finance ordinary entrepreneurs. But the main condition will be dynamic development and constant expansion.
Venture funds are a kind of motivation for the constant expansion of business, spheres of influence and products. The most striking example of a company that existed at the expense of venture funds is Apple.
Finding an investor: step-by-step instructions
Now we publish detailed and step by step plan on how to find an investor to start a business:
Step 1. Drawing up a business plan.
As mentioned earlier, a good business plan for an investor will always bring several advantages to a businessman’s piggy bank.
What should be in a business plan:
- Description of the idea;
- Economic calculations;
- Project payback period;
- Development prospects;
- Competitor analysis;
- Other information.
During and subsequent presentation, you need to carefully concentrate on all the little details. You need to pay attention not only to all the information inside, but also to your appearance, presentation of material, confidence, etc.
The use of tables, graphs and other graphic materials is encouraged. They help to better perceive information and focus attention on the right points.
It would be a good idea to rehearse presenting your home business plan several times. Also be prepared for additional questions.
Step 2. Selecting a form of cooperation.
Before you start looking for an investor, you need to decide on the proposed model of cooperation. Of course, you can completely rely on an experienced businessman who himself will offer an interesting way of interacting with business, but then you lose your dominant position. We must not forget that it is not the investor who dictates the terms, but the businessman.
In total, there are 3 ways of cooperation:
- Receiving a percentage of the amount invested in the business;
- Receiving a percentage of profits for the duration of the entire business;
- Obtaining a share in the business.
Having chosen the method of cooperation that interests him, the aspiring businessman must indicate this method of cooperation in his business plan.
There are times when investors do not agree with the chosen cooperation model. You should analyze this situation and understand whether it is worth following the lead of a more experienced businessman, or whether it is better to insist on your own.
Sometimes it is better to give up your principles and receive funds for the implementation of the project, and sometimes to refuse the offer and find another interested party.
Step 3. Finding an investor.
After all the preliminary work has been completed, it is necessary to begin the process of searching for an investor. You need to work in several directions at once, making contacts both in the field of entrepreneurs and investors, and asking your friends.
Working according to the list presented above, you can try various options for attracting investments, and if nothing works, then you should contact the bank.
Step 4. Negotiations with potential investors.
It is advisable to find several interested parties who would be willing to invest free money in the development of your idea. Then you will be able to negotiate from a position of strength and dictate terms. But newcomers rarely find more than 1-2 interested people, which is why you should approach the negotiation process very carefully.
Convincing the investor that he will make a profit is the main task of these negotiations. At the same time, it is worth remembering that they will look not only at the prospects of your project, but also at you, so you should watch your speech, appearance and manners.
It is advisable to answer all questions that potential investors may have. This will ensure that you are really working on your business idea, and stupid mistakes will not occur during the implementation stage.
Negotiations are the most important part when searching for an investor.
Step 5. Conclusion of an agreement.
After the negotiations have been successful, you will need to enter into an agreement with the investor. It is advisable that you take care of creating the agreement yourself and in advance. You should contact an experienced lawyer who can draw up a contract that is beneficial for both parties.
Important points that should be in the contract:
- Term;
- Investment amount;
- Form of cooperation;
- Rights and obligations.
Portals for finding an investor
Now there are various portal sites that act as intermediaries between investors and budding businessmen.
We present to you a list of 5 sites where you can find investments:
1. Ventureclub– a real treasure for investors and startupers. Anyone who wants to find investment in their project can go to the site and, after a thorough interview, submit a project. Investors who are interested in the proposal will be able to evaluate the idea, financial prospects, and discuss details. It is attractive to businessmen because there are many investors on the portal and the company is directing all its efforts to attract additional people to the ranks of investors.
2. Start2up– a platform that brings together investors, startupers and people who want to do joint business. The service is more suitable for finding potential partners to start a business. The site also contains information about the sale of various commercial assets, which will also be useful for a novice entrepreneur.
3. Napartner– a platform for finding investors in projects in various fields. If you take a closer look, you will notice that many startups have questionable ideas and ways to implement them. Accordingly, good projects here are worth their weight in gold and find investment in short time. At the same time, the number of investors in relation to the number of startups does not cause optimism - there are 10 times fewer people willing to invest money than there are projects. Suitable as one of the ways to attract a potential investor.
4. Starttrack is the best service for serious companies. Despite the fact that the number of companies that received investment in this system is small - only 36, nevertheless they are still functioning, generating income. Starttrack is an investor community that promotes the idea of investing as a type of income. At the same time, we can safely say that any community of investors is an excellent search for a partner to create a business. It should be understood that you can use this service only if the project is serious and the idea is attractive.
5. Boomstarter– the most popular crowdfunding platform in Russia and the CIS. For a startup in the IT, gaming or original fields, this is an ideal opportunity to seek initial investment. In most cases, the main idea is presented as a product/service. Users making a contribution should receive a reward that would interest them.
9 rules to follow when looking for an investor
Rule #1. You need to start looking for an investor as early as possible.
In order to find an investor who agrees to invest his money in the project, you will need a large number of time. You need to look for new business contacts and talk with interested people at the stage of developing a business plan. This will significantly reduce time costs and simple ideas.
It should also be understood that many investors need time to assess the real development prospects of a particular company. And when interacting with banks or investment funds, the time required to analyze all aspects of a potential client’s business activity will be quite large.
Rule #2. Collect as much information as possible about the investor.
Collecting as much information as possible can help in two ways at once: screening out candidates and conducting better negotiations.
For the first one you will need to know:
- What areas is the investor interested in?
- Where does one usually invest money?
- In what volumes?
- What kind of profit is it claiming?
It is important to understand that it is not worth turning to a person who usually invests millions in a project for a small sum of money. He simply won't be interested in your offer.
To conduct negotiations, you may need everything you can find out about a potential investor. After all, in essence, this will be the process of selling some share in the business (to one degree or another). And for sales, it is always important to find the client’s pain points and put pressure on them, pushing them to the fact that it is you and the investment in your business that can allow him to solve all his problems.
Rule #3. Plan your investments.
You need to name the specific amount that will be required from a potential investor. You cannot operate with ranges, only in extreme cases, when you are not sure of price stability in a certain period of time.
You also need to understand that you should not ask for more or less money. This will mark you as someone who hasn't thought through their business plan enough.
Rule #4. Voicing real goals.
You may have the most ambitious goals, but they will be of no use to an investor. Setting the goal of “entering the global market” for a company that hasn’t even existed for a month is at least very optimistic. It will be much more interesting for an investor to hear “entering the regional market and obtaining a 20-30% share in such and such an area.” But meanwhile, you will always have to justify the adoption of this or that goal.
Rule #5: Don't be shy about your idea.
It's hard to imagine Henry Ford being afraid to tell others about his ideas. On the contrary, he openly declared that he would create a device in which he could sit and drive down the street without additional traction. You need to do the same with your business ideas in negotiations.
Feel free to express your ideas, even if someone thinks that they are far from ideal and difficult to implement. Remember the presentation! The more confident you are, the better you are perceived.
Rule #6: Assembling a team is the best idea.
All promising projects began in the head of one person. But it can be difficult to realize all your ideas alone, and this is a generally accepted fact. It is best for aspiring businessmen to find a team of 3-5 people who, at the initial stage, would deal with various matters of the company, solving each of their own issues, and becoming professionals in their field.
It is important to assemble a team of like-minded people who will burn with one common idea and spend all their energy on implementation. Those who are slackers have no place in such a team.
Rule #7: Think about the benefits of working with you.
Speak to the investor in his language. Promise him profit, then offer him prospects for growth and expansion. You should think carefully, even at the business planning stage, about the question “What will my project be good at?” Having answered it for yourself, ask the same question, but from the investor’s point of view.
Rule #8: Try to be as close to investors as possible.
Attend various meetings of potential investors - business forums, conferences, and other events on a nationwide scale. At one such conference you can talk to hundreds different people who, to one degree or another, will be interested in investing in your business.
A little psychological trick: don't say you came looking for investment. Try to look like one of the investors - a person with money. Then you will be able to be one of everyone and they will begin to treat you with greater trust and sympathy.
Rule No. 9: Honesty is the best weapon.
When looking for a potential investor, you need to understand that you will be mutually beneficial partners. That is why you should always provide the most complete and honest information about the company’s affairs, its prospects and your plans.
More often than not, it is better to hear a realistic “I would like to sell the company in a year for several million dollars” than “I will concentrate on fulfilling the company’s goals and expanding it, and going global.” In the first case there is honesty and transparency, in the second there is nothing but floridity and avoidance of answer.
Following these tips is quite simple, but following them will help you gain an advantage in negotiations over other similar seekers of free finance and interested investors.
Conclusion
In Russia, the culture of investing your own money is just beginning to take shape. This is confirmed by numerous surveys among ordinary citizens. Many people still prefer to invest their money in low-yield and illiquid real estate rather than buy shares of some young and developing company. But investors are of enormous importance for business development within the country.
What we have in Russia now: a large amount of free cash among large businessmen, the desire of banks to finance only stable companies, and the development of investment funds that are interested in interesting and profitable ideas.
What does it mean: in Russia there is a large amount of free cash that investors would like to use to invest in some interesting projects. Also, the new policy of the Central Bank, which directly states that banks should also switch to the investment model of the economy, inspires confidence and optimism among investors.
Finding an investor is one of the key stages when creating a business from scratch. Raising funds will not only allow you to create a business, but also develop it, reaching a new level.
Investors can act as individuals with sufficient capital, as well as companies interested in making a profit. In order to interest an investor, you must always talk about money and income. Only after this comes the prospects of the idea, risks and other factors.
Drawing up a competent business plan and planning negotiations with an 80% probability will tip the scales in your favor. That is why you should not only understand your own idea, but also be able to present yourself competently.
