Search for investors for implementation. How and where you can find an investor for a project. Search Options for Small Businesses

Having started a business, an entrepreneur often feels an urgent need for an influx of additional funds. He can fill the financial gap by taking out a loan from a bank, or he can try to attract investors.

Doing the latter is usually much more difficult. How to find an investor? What nuances of communication with them should be taken into account? How to determine the chances of an enterprise to receive the desired amount of investment?

Investments: what are they?

Before we talk about ways to attract investment in business, let's take a short theoretical excursion. Let's define our conceptual apparatus. What is investment? What varieties are they represented today?

In modern economic theory, investment classification is carried out on the basis of a variety of criteria. There are three generally accepted among experts: the object of financing, the method of investment, and the strategy for their implementation.

According to the first criterion, investments are divided into the following types:

• so-called “real” investments;
• financial investments.

According to the criterion reflecting the financing method, investments are divided into:

• direct (directive);
• "portfolio"

According to the criterion of the applied strategy, investments are:

• risk-free;
• moderate;
• aggressive (“venture”).

The most important thing that an entrepreneur should understand is that in the modern capitalist world there are practically no “ideological” investors who are ready to simply invest in a business based on personal sympathy for the project. Many businessmen, as experts note, show some naivety. They think: “I’ll find an investor and immediately get rich.” But such thoughts are fundamentally wrong. First of all, the one who will invest in business will get rich - these are the laws of capitalism.

Who is he - an investor?

Subjects of investment in business can be a variety of groups of individuals and organizations. There are quite a lot of classification criteria here. The generally accepted types of investment subjects among economic theorists are as follows:

• Russian government organizations (foundations, government and municipal structures, state-owned enterprises);
• private companies registered in the Russian Federation (LLC, JSC);
• individuals - citizens of the Russian Federation;
• foreign government organizations;
• private foreign firms;
• individuals who are citizens of other states.

Where can I find an investor from these categories? There are many options. The easiest way is to go through the relevant portals and numerous forums. You can periodically review magazines on economic and business topics. In the texts of materials and interviews that are published there, contacts of a variety of funds that provide investment support to entrepreneurs are regularly found. A completely working way is to attend business exhibitions and conferences. Representatives of various organizations often make presentations at them. A regular guest at such meetings is a private investor. You can find an opportunity to chat with him during coffee breaks or after the event. As a rule, such people are very open in communication and easily engage in dialogue.

How to find an investor who would prioritize investing in companies operating in a specific field (in IT technologies, for example)? In this case, experts advise purchasing industry magazines and attending conferences and seminars where representatives of companies operating in a certain segment speak.

People who are ready to invest in a business can act either as a single person or in various formats of consolidation with others. How to find an investor who is guaranteed to be ready to finance a project? The strategy for finding a source of investment will depend on what type of cash flow we need. In turn, this is determined by the nature of the business, the area where business activity is carried out and a number of other factors. Let's consider these nuances.

Real investment

Real investments mean investments in various types of assets. This may be the allocation of funds for the purchase of certain resources or the supply of them to the entrepreneur in ready-made forms. That is, for example, if a business needs processing machines, then an investor can make a “real” investment by allocating funds for the purchase of equipment or providing a partner with ready-made samples of units.

The “ideal” investors for projects of this type are government funds. Why? As experts say, such organizations tend to keep the progress of investment projects under control. This is much easier to do if the subject of monitoring is a real asset.

The ideal business that has the greatest chance of receiving such financing is a small or medium-sized manufacturing enterprise (producing goods) that has been on the market for 3-5 years or more.

How to find a “real” investor? What might make a person or organization interested in investing in a company's assets? Experts recommend trying the following tactics:

Show how profits have grown over the years and the company’s management strategy has been improved;

Make it clear that the owner of the company is an experienced and competent person;

Show that the business is stable: there are suppliers, sales are established.

Usually, if the company is profitable and the sales market is large enough, there are no problems with finding an investor willing to invest in the “real” assets of the entrepreneur.

Financial investments

Financial investments mean the injection of funds into shares, shares and other types of securities issued by a company (or structures owned by it in the form of joint-stock companies, foreign legal entities, offshore companies, etc.).

Ideal investors for investments of this type are private (Russian and foreign) funds. Why? In contrast to state-owned companies, which are very conservative in their attitude to the speculative component of business, private business quite allows for serious injections into the securities of enterprises.

The ideal type of company for this type of investment is a large, federal or international organization operating for 5 years or more. Finding an investor for a small business within the framework of such a strategy will be problematic. Most likely, the overall level of capitalization of the company will not be enough to service the turnover of shares.

How to interest a financial investor? Experts offer the following options:

Show that the company's shares are resistant to industry crisis trends (against the background of securities of competing companies);

Tell about other investors who have successfully invested in the company;

Convince a person considering the possibility of pouring financial flow into a business that the business model is workable.

People and organizations with a good understanding of financial markets tend to operate in large cities. Therefore, the greatest likelihood of meeting such entities and finding an investor in one of them is in St. Petersburg, Moscow, Kazan and other major financial centers.

Direct investments

Direct investments are understood as cash injections, the object of which is the authorized capital of business companies. As a rule, we are talking about the purchase by a person investing financial resources of a controlling stake, a leading share, etc. If, say, citizen Ivanov says: “I bought Petrov’s business,” then this means that he made a direct investment in the business.

These types of acquisitions, in the theory of some economists, are often of a political nature (that is, they are often aimed not at making a profit, but also at increasing influence in certain areas at the municipal, district or even national level). Often, experts note, direct investments are unprofitable in financial terms.

Ideal investor: an influential person or organization, an oligarch, a major political figure (can be either a citizen of the Russian Federation or a foreigner). Why? These subjects of the business arena are ready for the fact that a potential investment object will not bring profit; they see it as a source of increasing their importance in certain areas.

Ideal business: city-forming enterprise, IT project of federal or international scale (for example, a social network, an anti-virus company with a powerful product, etc.).

How to find investors for a business who are ready, like citizen Ivanov, to buy it? The great thing is that you most likely won’t have to do this in this case. If the project is worth the investment, the investor will come himself. Many experts think so, and we can probably agree with this.

Portfolio investment

When citizen Ivanov says: “I invested in Petrov’s business” (which looks quite contrasting with his previous “statement”), this means that he made a portfolio investment. This type of operation means the transfer of funds in favor of business assets with the subsequent goal of receiving income upon growth of capitalization (company revenue).

Example. Petrov's company has a capitalization of 1 million rubles. Citizen Ivanov came and offered the entrepreneur a deal. Petrov's company receives 200 thousand rubles of investment in exchange for a 20 percent stake in the company. The entrepreneur agrees. The business turns out to be successful, and a year later Petrov’s company grows to 2 million rubles. Ivanov, as we remember, having invested 200 thousand, received a share in it of 20%. Which is now equal to 400 thousand rubles.

The most interesting question regarding portfolio investments is the following: how to determine the very share that the entrepreneur will cede to the investor? There is no clear answer to this, but experienced experts recommend following these principles:

In any case, retain the controlling stake;

Give a percentage of ownership of the business, assessing the likely volume of subsequent rounds of investment (if there are any other investors in the future, a “reserve” of equity participation should also be set aside for them).

Risk-free investments

This kind of investment is aimed at extracting a practically guaranteed profit (usually small). This type of investment is comparable (and for the most part very similar) to a bank deposit, when the investor, having invested money for a certain period, returns it with interest. Legally, relations between an investor and entrepreneurs within the framework of transactions of this type are formalized, as a rule, in the form of loan agreements or the purchase of bonds.

What is the ideal risk-free investment subject? This is a state fund, a large corporation. Why? For both, stability is very important. Profitability comes second.

Ideal business: a large public or private corporation with a very large capitalization (allowing it to service bonds and loans).

How to interest an investor? Experts believe this is possible:

By publishing financial statements in an extremely transparent manner;

Showing actual performance results (market coverage, ratings, etc.);

Convince the sustainability of the business model.

Moderate investment

The main criterion here is the guaranteed absence of losses for the investor, regardless of how the business goes, but subject to a sufficiently high probability of extracting greater profits than with the first type of strategy.

Example. Ivanov tells Petrov that he is ready to invest in his business. The conditions are as follows: the contract period is three years, and if during this time the company grows, the investor will receive a profit in proportion to the increase in capitalization. If the business goes negative, the entrepreneur returns the amount of investment without profit. Let’s say Ivanov invested 1 million rubles, while Petrov’s company had a capitalization of 10 million. Option one: after three years the company grew to 15 million. Ivanov will thus receive 1.5 million rubles. Option two: in three years the company

Petrova loses 30% in capitalization. Ivanov, in accordance with the agreement, receives the invested 1 million back without any additional payments. Legally, the relationship between an entrepreneur and an investor can be formalized in the form of an option agreement for the purchase and sale of shares. That is, Ivanov, at the moment of signing an agreement with Petrov, buys securities from him and receives an option - the right to sell them - at the price that will be in three years.

This strategy helps very well in solving the question of “how to find an investor for production.” As a rule, expanding the capacity of a factory or plant means that the entrepreneur has found some new markets. Therefore, there is a high probability that the investor will want to finance an increase in the volume of production of goods for which demand is expected to increase. Due to similar patterns, using this strategy, you can find an investor for construction. Who, having seen the prospects for developing new markets, may decide to finance the construction of new, commercially in demand facilities.

Ideal investors: private funds, individuals (Russians and foreigners).

Ideal business: small and medium-sized enterprise, service company, catering facility, operating on the market for 1-2 years or more.

How to attract an investor? According to experts, this is what you should do:

Show the dynamics of profit growth and, no less important, in combination with the amount of costs;

Make it clear what principles the business model operates on and how sustainable it is;

Show that nothing prevents the company from developing (the sales market is large enough, there are no crisis trends, etc.).

Venture investments

This type of investment involves the greatest risks for the investor, but contains the possibility of receiving very large profits. The relationship between the entrepreneur and the entity investing funds allows for 100% unprofitability based on the results of doing business. However, the investor’s profit can amount to hundreds or even thousands of percent.

Example. Petrov developed a technology for producing wear-free socks using nanotechnology and invited Ivanov to invest 10 million rubles. into their industrial production. He agreed. According to the agreement between the businessman and the investor, the second received 80% of the company's shares and retained this share regardless of the company's success.

Option one: the whole world began to buy Petrov’s innovative socks. In three years, the company's capitalization has grown to $10 billion. 8 of which now belong to Ivanov. Option two: Petrov’s innovative socks turned out to be unclaimed. The company's loss amounted to 7 million rubles. Ivanov ultimately remains the owner of a share estimated at 80% of the remaining capital of the company, that is, assets worth 2.4 million, and has no claims against Petrov.

Of course, the above story is more fiction than reality. The venture market is a place where finding investors for a business is incredibly difficult. As a rule, funds and individuals who prefer an aggressive investment strategy choose 1-2 entrepreneurial projects out of 100. Having selected 10-15, they expect (and, as many experts believe, not unreasonably) the bankruptcy of 7-8 of them, that is, more half. And only due to the success of other companies do they recoup expenses and turn a profit.

An ideal business for this type of investment: a startup, a small organization that has just entered the market or is just about to do so. Venture strategy is one of the best ways to find an investor to start a business, despite the difficulties described above. The main thing here is not to stop searching, to offer, to act. And then the company will have a chance to get into those same 1-2 “elite” percent.

Ideal venture investors: private organizations (including those that specialize in this type of investment), individuals. Interestingly, this may also include some government funds. In particular, those aimed at supporting innovation. Thus, government agencies are gradually becoming the place where it is quite possible for even a novice entrepreneur to find an investor.

How to attract financing? Experts recommend the following tactics:

Tell the investor in detail about the target market, about who will definitely buy the innovative product;

Make it clear why the promoted product or service is better than solutions from competitors;

Tell us about the success of promoting a similar product (if there are such precedents) in other markets.

Attracting investments: tools

How is interaction between entrepreneurs and investors carried out in practice? Experts identify the following main mechanisms.

1. Personal communication with the investor

Most funds have offices, and with them - structures responsible for the “personal reception” of entrepreneurs, where experts sit and assess the prospects of businesses whose owners come looking for investments. Many economists consider this method of searching for investors to be one of the most effective. At least due to the fact that the proposal will be guaranteed to be considered. If an entrepreneur chooses a strategy of personal visits to foundations, then it is better for him to temporarily move to a large city where there are many such organizations (if he does not live in such a locality himself). Finding an investor in Moscow is much easier than in remote regions.

2. Remote communication (correspondence, phone calls, Skype)

As a rule, this method of interaction is relevant for cases where an entrepreneur lives in one country and an investor lives in another (or they are separated by significant distances). One of the advantages of this method is the ability to interact with several funds from different states and cities at once. You can solve the problem of how to find an investor in Moscow, and at the same time communicate with companies from the USA and Singapore. In this case, the chances of attracting financing increase significantly.

3. Public addresses of the entrepreneur

There is an option in which a businessman does not visit any specific structure, but addresses the entire business community. The main “platform” where it will be easiest to find a private investor will be the company’s website, the personal blog of its founder or his page on a social network. The most popular method of interaction with the public is crowdfunding, in which absolutely anyone can invest in a business.

You can attract investors through several channels at once. This is a common practice for businessmen today (especially startups). The main thing is not to retreat, to convince yourself: “I will find an investor.” Unlike banks, which either give a loan or not (and then some time must pass before the next application), people who decide to invest in someone's business can change their minds.

Having refused an entrepreneur today, the investor may well change his mind and give consent tomorrow. This nuance, experts believe, is one of the key ones in building a successful strategy for attracting funds to business. Don’t just think about how to find a private investor. As we said above, in the modern capitalist space there are also interested state structures.

Often successful companies are created through the collaboration of several parties: one has an idea, the other has the resources to implement it. Thanks to the Internet, it has become easier for these parties to find each other. However, it is important not just to find a person with money, it is necessary to attract a good partner, cooperation with whom will become the basis for a successful startup and further advancement of the business. When considering investor proposals, try to think about which of them will be interested in your business. To do this, formulate the stage of development of your business: will it be its origin, formation, growth, maturity, or decline. Every company that is at various stages needs its own investor.

Features of the stages of company activity
At the inception stage, as a rule, an entrepreneur has nothing, only an idea, and sometimes a registered patent. There are also problems with the formation of the management team; business processes are not established. External investors are often relatives and friends, or they can be private individuals who have some experience in this area and are willing to take risks. On our website you can find such investor offers.

During its formation, the organization already has an established production of finished products, or already provides services, but its activities do not bring the desired income, and sometimes are even unprofitable. This stage is characterized by business processes that have not been fully developed; only the formation of a management team occurs. At this stage, it is necessary to pay attention to the financial and legal documentation of the company. An investor who is interested in it should easily understand the corporate structure of the organization and its financial position. It is good that the company does not participate in litigation, disputes with government services, etc. At the stage of expansion of activities, the volume of operations performed increases, and profits become stable. As a result, the company begins to occupy a stable position. The stage is characterized by well-established business processes, new markets and projects are opening. At these stages, banks, funds and other serious investors are involved in financing.

Advantages of our business portal
The business portal site is designed to assist its visitors in developing their business and increasing capital. In particular, this page presents various investor proposals. We recommend that you read them carefully and do not make hasty decisions. Try to learn as much as possible about your partner and assess his reliability. When drawing up contracts, read them carefully, let there be as few understatements as possible, and let all agreements be recorded in writing. On this page you can both find an investor and become one yourself by posting an investor proposal. Many of our visitors were able to find reliable business partners with whom they have been working for many years. Perhaps you will become one of their number.

The AngelList online platform is one of the world's largest platforms for attracting investment in startups. Its database includes more than 200,000 companies and 21,000 investors, two thirds of them are business angels. Over the three years of the project’s existence, about 1,300 companies, including services and, have attracted more than $200 million in investments. We spoke with the head of the AngelList fundraising program, Ash Fontana, who visited Moscow at the invitation of the IIDF, about the development of the project and what an entrepreneur needs to know when trying to attract the attention of investors.

- How big is the difference between venture investors in the US and in Russia?

There are a large number of investors in Russia and certainly a lot of capital. Investors already specialize in financing at various stages. This is important when there are accelerators, business angels, and venture funds - investors who can help the company at every stage of its existence. Of course, the market is not yet as developed as in the US, but the picture seems to be starting to take shape.

- Are there many projects from Russia on AngelList?

Thousands. Outside the US, the largest region in terms of the amount of money invested on AngelList is the UK, twice as big as Russia. However, Russia is twice the size of any other European country on AngelList.

-How does the process for listing startups on AngelList work?

Anyone can list a company on AngelList. There is no selection test or any requirements, you just need to fill out a profile. But to get money, you need to be the company that investors choose. We don't have any background checks, but we do this cool thing called "company pitching" - we research projects, conduct interviews, and if we think the company is good, we send investors a letter with a note about it. We do this for about 5-10 startups a week.

- How does moderation work for investors?

Investors must be accredited - in the US this means having $1 million in capital (real estate value does not count) or $200,000 in income over three years. If you are considered an accredited investor, you can view companies on AngelList. And when you commit to investing through our platform, we re-verify that accreditation and a few other details. If you're investing for the first time, we provide training to cover the steps you take as a first-time investor.

- What are the most common mistakes made by entrepreneurs presenting their project on AngelList?

The first mistake they make is not even the profile, but the timing of its creation. Many people first talk to friends and acquaintances offline, trying to attract money, and then go to AngelList - and this is a mistake. They need to do everything at once if they want to attract the attention of investors in the shortest possible time.

The second mistake is an overly cautious approach to information disclosure. Entrepreneurs think that competitors will take advantage of it. It's very rare that someone actually steals ideas. If your idea is good, it will be difficult to copy.

The third mistake is that entrepreneurs are not specific enough. It's worth remembering that investors are looking at hundreds of projects. So you need to immediately clearly define how you differ from others. People start with general phrases like “we will change all markets” or “we are creating a revolution”, use proud words, but instead they should write “we created this object, a product that is new or unique because of this and that.”

- What advice would you give to entrepreneurs from Russia?

Show that the problem you are solving is global and not specific to Russia. You need to find ways to describe your team's accomplishments that make sense to global investors. Try to explain the team's merits on an international and translatable level. It is difficult for an American investor to understand what “I studied at Moscow State University” means in comparison with Stanford. He knows what Stanford is, but he doesn't understand what MSU is. Instead of “I studied at such and such a university, worked in such and such a company, they are all Russian,” say better: “I won the mathematics Olympiad three times, I was one of so many best students on the course.”

Finally, try to get feedback from your fellow Americans. Investors from other countries are suspicious of entrepreneurs who have failed to attract attention even in their hometown.

- Recently, on AngelList you can invest not only individually, but also by joining a pool.

Now we manually manage such transactions and do not allow just anyone to take over and syndicate. In a syndicated transaction, the leading investor is important, who must be a professional and have a good history. When those wishing to create a syndicate come to us, they say how much they are willing to invest in the company, what the cost of financing should be, and what kind of return they want to receive per share. Then they write about a page of note about why they want to invest in this company, why they believe in it, why they are syndicating the deal and send out an email to investor followers on AngelList. Having received applications, they choose who to include in the syndicate, what the volume of funds to be placed will be, then they distribute shares, collect funds, prepare legal documents and transfer them to us. AngelList creates a fund, all members of the syndicate invest there, and the fund itself is invested in the company. So we manage the fund, we maintain all its legal and tax documentation.

- How popular is it?

It has become incredibly popular! Such deals are closed very quickly - usually within a day. One, for a couple of hundred thousand dollars, closed within an hour. Interestingly, people are willing to provide funding to existing syndicates for future deals; we have already raised about $10 million in this way and that’s in just five weeks!

Previously, there was a restriction on AngelList - an entrepreneur could contact an investor only if the investor himself noticed him and wrote to him. Is this true now?

Five weeks ago there were changes to the site, we gave companies the opportunity to make their profile public, post it on Twitter, blog or somewhere else to say: “I am attracting investment, look at my profile on AngelList and see how much I have already collected". All this is now legal. Over the past five weeks, about 3,000 companies have taken advantage of this option. This is a great opportunity for startups to attract new investors. For example, companies that have a lot of users with money, say, manufacturers of software for doctors, they can write to these people and say “hey, I know you haven’t invested before. But we raise money, and you use our product, so invest in us!” The only negative is that the company must show us that the investor is accredited, and we will help arrange everything properly.

Recently, AngelList allows startups to also search for employees. How is this recruiting part of the project developing?

It is growing because finding people for business has always been a big problem. As far as we know, more than a hundred people find work - sign a contract - every week. So this product is developing surprisingly well, especially considering that it has only been running for six months, we started creating it a year ago, and the entire project is led entirely by one person.

Is there a correlation between how well a company raises funding and how popular it is in the eyes of employees?

Yes, very big! If you are invested in and have a good profile on AngelList, you will be more attractive to candidates. Because they see that you raised money and can definitely pay them.

- What industries are popular on AngelList?

We have biotech, the creation of consumer hardware in the field of healthcare is very popular, the production of gadgets - for example, devices that allow you to lose weight, fitness gadgets. Education is also popular. These are the industries that people don't expect to become popular, but they do.

- Do you track the fate of your “graduates” - projects that have already attracted investment?

Yes, and we track how much money they managed to raise later – now it’s more than $2.5 billion.

The AngelList platform itself attracted a round of investment of $24 million in September, what will this money be used for, what are the plans for development?

We will continue to do what we already do - hire the best engineers and designers, employees who work on our products. In addition, we will use them to finance the company’s expenses. After all, commissions for attracting investment will not return to us soon - we receive money only when investors make a profit, and this is usually many years later, and in the meantime we need funds to pay expenses and pay salaries.

We receive a fee for attracting funding, that is, a share of 5-10% of the profits that investors will receive from investments on AngelList. This only applies to syndicated and online deals. If you created a company profile on AngelList, but then made a transaction offline, everything is okay, we do not claim any commission.

-You have many clones. Is there anyone you can call your competitor?

We don't think much about competitors because it distracts us from our work. In addition, this is a business with a network effect: the platform is useful for companies only if there are many investors on it, while at the same time, investors only need it if there are many companies on it. A critical mass of both is needed before such a platform becomes useful. We have this critical mass, and it will be difficult for any other company to achieve it.

- How will the angel investment market develop in the world and in Russia?

The industry is becoming more efficient - the more information, the more informed decisions investors make, and we help this happen. It becomes easier for business angels to decide because they can compare companies faster and have more access to their founders - through AngelList, or LinkedIn, or Facebook. At the same time, venture funds still need to prove that they are what companies need. Russia has a good chance to become a developed market because there is a lot of capital here, a lot of people with business experience. In addition, there are many people here with technical education, which is a big advantage. So I expect that there will be more and more deals in Russia.

01Mar

Why do you need an investor?

We all understand perfectly well that creating a business at the initial stage 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. No one will be interested in an “innovative breakthrough,” “an original idea,” or “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 both parties are satisfied with these points, then the further stage of negotiations proceeds, in which the investor tries to obtain the most 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 interests 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 to raise funds for businesses 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 are publishing a 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 there will be no stupid mistakes 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 a 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, it will take a lot 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 with hundreds of different people who will be interested in investing in your business to one degree or another.

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 be both individuals with sufficient capital and 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.

Anna Sokolova

Step-by-step instructions and pitfalls

We have already made detailed selections about where to go for a startup with a bare idea and where to get money for business in various niches, but this did not stop the flow of questions from newcomers. This time we have combined Rusbase training materials into a single logical chain to guide even beginners.

Where to start looking for investments? People who ask us this question are usually at the idea stage. To attract investment, they will have to go through a long and labor-intensive journey: thoroughly develop an idea, study competitors, assemble a team, create a working prototype of a product, make a competent presentation, register in online services to find an investor, upgrade to an accelerator, participate in competitions, make acquaintances at events, find potential investors and write them a lot of letters, read the specialized press and try to get on its pages.

Some points here are optional, some people do without them, but the general algorithm is as follows. Passing it in itself does not guarantee attracting investments - it all depends on you and your product. But without a presentation and understanding of the investment market, you definitely won’t see it.

What to do with the idea?

Work it out! Your brilliant idea is worthless until it starts attracting an audience and making money. Without a working prototype and a team, investors won’t even listen to you - unless, of course, you are already known in the market as a successful serial entrepreneur. By investing in an idea, an investor risks not only money, but also his reputation. To prove your ability to run a business, you need to independently find at least the minimum resources to create a product.

Often, startupers are afraid to tell experts about their brilliant idea, thinking that it will be stolen. In fact, an idea is worthless until it is implemented. This simple truth is reflected in the fifth paragraph of Article 1259 of the Civil Code of the Russian Federation: copyright does not apply to ideas, concepts, principles, methods, processes, systems, methods, solutions to technical, organizational or other problems, discoveries, facts, programming languages. You can secure intellectual rights only for technology, unique design and software. Learn more about your copyright protection options.

Moreover, the idea almost always turns out to be not new if you thoroughly study the market. Even if the product is unique, you can usually find substitute products, albeit with different properties. An investor will never believe that you have no competitors at all. He will think that you haven’t probed the waters well and that you shouldn’t be given money.

Before you approach venture capitalists, you need to understand the difference between a startup and a small business. In the public consciousness, the word “startup” often means the initial stage of business development. In fact, this is a special type of enterprise that implies product innovation, global ambitions and rapid growth. If you want to open a traditional business (for example, an atelier or a flower stall), then you will have different investors and a different strategy. Venture investors still prefer projects related to IT and innovation.

Where to look for a team?

To get even a fraction of an investor's attention, you need a working prototype and a team. It’s difficult to create a product alone, so you need to try to infect someone else with your idea.

Experienced entrepreneurs advise attracting like-minded people at startup events. Especially at hackathons, where you can see a person in action. You can search for competent co-founders using special services - for example, on the website CoFoundIt.ru, which recently launched IIDF (the base is formed from accelerator graduates). You can also always make inquiries from friends or call out on social networks, but in this case there is less chance of snagging an experienced specialist.

More information about team formation can be found here:

If you already have an MVP

A working prototype is not like a landing page with empty forms. At the investment search stage, it should already be tested by potential clients. You also need to come up with and be able to clearly explain a business model - how you will earn money per unit of product.

If theoretical knowledge did not help you understand the idea, MVP and monetization strategy, you can turn to product development specialists. For example, this is done by the company Create, whose services will cost you from 150 thousand to 1 million rubles, depending on the amount of work.

Well, if you have a working prototype, you can start looking for an investor. To do this, you will need a thoughtful, compelling presentation that will become the basis for your pitch.

But before you dive into the intricacies of creating perfect slides, you should think hard: do you really need an investor? It is important to understand that investment is not a panacea. Business is not built on them, but on customers and sales. If this is not the case, then no investor will help you. It is best to attract investments to increase sales, because the essence of a startup is rapid growth. If you develop well, investors will come to you themselves, you’ll see.

So sometimes you just don't need an investor. Some startupers generally manage to develop a company only with their own money - this is called bootstrapping, which translates from English as belt-tightening. And this approach has a lot of advantages - for example, complete freedom of decision-making and serious development of entrepreneurial skills.

In addition, there are hundreds of free or cheap services on the Internet that will save you money, effort and time when solving various business problems.

How to make a presentation for a startup?

Investors are doomed to watch hundreds of presentations a year - respect their time. The presentation should be concise and well-structured, that is, contain visual information about the team, product, market, audience, business model and capitalization.

Read about the rules for creating a successful presentation here:

If you still can't combine these tips and our free templates into a high-quality presentation, you can.

But beautiful and clear slides alone are not enough for investors - they want to hear about money and their profits. To prepare for tricky questions in advance, first read these materials:

Search for investments through startup databases

When you already have a product and clear outlines of the project (which are outlined in the presentation), you can register with online investment search services. Investors are looking for projects there in the niches they need. Posting in startup databases is usually free, but projects undergo moderation, the severity of which depends on the resource’s policy.

• Rusbase Pipeline adds startups only if there is a working prototype and signs of demand (we currently have about 350 projects in our database), investors - only if they are ready to invest at least $50 thousand in one project (their list exceeds 200 names).
• StartTrack is a crowdinvesting platform from IIDF that helps investors enter into joint deals. A startup needs to pay a commission to attract investments. There are currently 725 investors and 37 projects in the StartTrack database. This ratio hints that the site’s requirements for startups are quite high.
• Spark is a service for finding an investor who has retrained as a technology project crowd (similar to Habr), where you can share experiences and post vacancies. There are 4249 projects in the database, 1329 of which are seeking investment.
• Napartner is one of the first startup exchanges on the Russian market. As indicated on the website, there are 1,139 registered investors, 9,892 “innovators” and 456 projects seeking investment. There is also a section for selling ready-made businesses and a vacancies section.
• Askcap is perhaps the largest Russian startup database. According to the project’s own information, the site contains profiles of 5,410 projects, most of which are available only to authorized users. 163 partners work with Askcap - venture funds, incubators, accelerators and technology parks.
• AngelList is the world's leading service for finding startups and investments, which has spawned many clones (ours are listed above). Its database includes 1,589 startups and 378 investors from Russia. AngelList provides opportunities for co-investment in projects, posting vacancies and resumes.

Participation in competitions and other events

Competitions help to gain valuable competitive experience, and if you win, a grant and the attention of investors (including through reporting publications in the media). In Russia and abroad, competitions, hackathons and free educational programs for startupers are regularly organized - it is convenient to follow this flow of opportunities with our tag.

It can also be helpful to go to industry events, especially if you're new to the venture scene. There you can listen to successful technology entrepreneurs, meet potential investors, catch the main trends, talk about your project and get feedback. Of course, moderation is needed in everything - connections and parties alone cannot promote a project. We collect the main events of the startup industry in the “Entrepreneur Calendar” section.

Active search for an investor

If you haven’t found an investor at events, you can try writing to venture funds. Try it - because cold and warm contacts do not work well in such matters, the most effective means has always been and will be personal acquaintance.

Before writing a letter to an investor, it is critical to make sure that your project matches their preferences. Funds usually indicate on their websites what niches and stages of startups they are interested in. If not, then you can still guess about it from the list of portfolio companies (which should be studied in any case). To compile a list of funds to which you can send your project for consideration, you can use our database of investors - there are convenient filters by niche and stage.

What to write to an investor? Before you sit down to write, you need to carefully study the foundation’s website. Fan mailings to investors never worked. Also, under no circumstances should you write from someone else’s mailbox. In order not to be left without an answer, you need to accurately formulate the subject of the letter, adequately introduce yourself and the project (and yes, ask a literate friend to proofread the text for errors) and explain why your startup is relevant to the fund (for example, it is similar to or complements one of the portfolio projects). If the letter consists only of a link to the attached presentation, it simply will not be opened.