August 10, 2010
Did you know that the reason why you are not getting funded may have to do with the fact that you are not looking for the right investors? Thatâ€™s right, not all investors are the same and some will not invest in your industry.
So, how can go about finding the right investor to contact? Well, there are several steps in doing that. First, you need to take a look at your own business and determine what industry, stage, and geographic location your company is in. You also need to look at the economy. The economy? Yes, thatâ€™s right, some investors thrive on investments they make when the economy is bad and take advantage of opportunities that other investors donâ€™t, whereas other investors will invest only when the economy is good and feel that their money is not at risk.
There are several steps in researching investors to contact. The best way is to go to their website and see what they are about. There are several things to look at and they are listed below.
Stage preferences are the first thing you need to look at. What is your stage and what stage does the prospective investor fund? If you are looking for series A or B funding, which is an early stage venture capital funding, you should probably look for venture capital firm which is dedicated to early stage companies. The truth is that venture capital firms specialize in early stage companies and donâ€™t mind the high risk investments, where as private equity firms invest in later stage companies who are looking for series C or D funding, investments earmarked for growth and expansion. If you need funding for an IPO, you should look for a firm that invests in mezzanine funding and can bridge capital gaps.
Industry preferences are equally as important to look at. You need to keep in mind that investors are either former entrepreneurs themselves or have worked in key management positions in large corporations and are familiar with only one particular industry or several. Investors tend to invest only in those industries they know. For example, if your industry is consumer technology, you should not contact investors who invest in healthcare or energy. They are not likely to fund you, because they may not have the expertise in your industry, likewise, if you are in healthcare, it would be a waste of your efforts to contact investors who invest in consumer electronics. At the same time, if the firm you contact invests in your industry, you should find the right partner of the firm to work with. Many investment firms are partnerships and finding the right partner with whom you can have a good business relationship with is key to get funding and keep getting funding.
Geographic preferences also determine whether you get funding. The investor may invest in your stage and industry, but he may not invest in your location. Some of the larger investment firms will invest internationally, but most investors will usually invest only within 150 miles from their office or home. Keep this in mind when seeking an investor to contact.
Checking if the investor is active is also important. As mentioned above, depending on the economy and other factors, investors may be active or inactive. If an investor is not active, that means that he is not investing at the current time. You can usually see this on the investorâ€™s website before you contact him. Check the â€œin the news or pressâ€ section of the investors website and look at the press releases on their site. If the latest press release is more than a year and a half old, chances are that the investor is not active and will probably not invest at the current time.
The truth is that you can get the resources to find the right investor very quickly when you go visit VCgate and buy the Complete Venture Capital, Angel Investors, and Private Investors Database. This interface is easy to use and enables you to instantly find over 4300 investors worldwide with their funds collectively adding up to over $900 billion. Who knows, some of this funding may have your name on it. If you have a good business plan, why not? Along with the database, you also have many resources available to consult to help you win over investors. So, why donâ€™t you give us a try? You wonâ€™t regret it.
All the best and good luck!
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