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How to Convince Investors to Back your Business

By Rohan A T

Funding is an essential keyword for any business. Proper funding is important for your business to expand and most importantly to survive. It is hard for some individuals to finance the entire operations of a company all on their own. Two other ways that one can use to get the proper finance needed is by borrowing from lenders and by attracting investors. Investors being a much safer choice will help the company to reduce the company’s credit. The proposition of attracting investors to invest in your company is a hard and time-consuming process. But there are some foolproof ways to attract investors. Some of these are -

The Importance of Networking: Proper networking will help you pitch your company to potential investors in a less formal way. When done right it can make investors more likely to consider choosing your business ahead of your competitors. This helps you to not only pitch your idea but to also strategically rely on the social capital built through the networking process.

Show Your Results First: This can be a catch 22 situation. But it’s worth making an effort to acquire customers or users before you approach an investor, rather than seeking funds first and customers second. It is a good method to get investments from non-institutional investors. You can use this to your advantage to attract more investors because Investors want proof that your idea is going to work, and nothing proves this better than having real, paying customers.

Get the Investors Advice: Rather than just begging them to Invest, ask them for advice to improve or expand your business. This will help you to get their trust. To get investors to invest in your business you must gain their trust first. This will also generate the notion in the investor's mind that you value his inputs.

Choosing the Right Leadership Team: When you meet a potential investor they are not only looking about the marketability of your product or idea, they are also looking into who all are the real founders of the company. A study suggests that an investor is likely to choose to invest in companies with more than a single founder or leader.

Let them Understand about their Returns: The sole aim of every investor is to get the maximum returns on his investment. So if you could pitch and convince them on the returns that they are going to get by investing in your company your job is more or less completed. While pitching your idea it is important that you highlight what they will personally gain from investing in your business.

Find Investors with Tangible Value: Getting investors to investors in your company is all good but it is an added bonus when you can find investors who can really help you make your business even stronger and profitable. By getting such investors you are also getting a silent partner in your company who will also try to help you to improve your business with their knowledge and industry connections.

The Importance of Online Investors: While you are looking for immediate investments your location can pose some problems. But by taking advantage of various online fundraising markets you can solve that problem. Going online will also help you to pitch your idea to far more potential investors.

Money is the fuel that every business needs to operate smoothly. Investors are the least risky medium of finance a company is going to get. So, by attracting more investors you can ensure that your business is going to develop without major financial challenges.

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