As discussed earlier within my previous articles, you will find all sorts of different investors around for the entrepreneur to select from. We have already covered the kinds of investors you will find, which is often business lenders, angel investors, institutional investors, or venture capitalists. This is just a broad array of investors that you could see. Once you have your business plan and your executive summary ready, you’re now ready to find the right investor to look for capital.

There are many factors that you might want to take into consideration before actually contacting your prospective investor. listed infrastructure There are numerous things you’ll need to appear into, such as for instance stage, industry, and geographic preference. Furthermore, it’s also wise to look at their portfolio companies, who they’re and what they do. You will dsicover all of this below.

Stage Preference

Basically, stage describes the stage that the company is in. If you should be pre-prototype, or your prototype has just been developed, you’re either seed stage or early stage. These stages are usually the greatest risk stages for investors, but their ROI, or return on investment might be very high. On the other hand if your company is at a later stage and already includes a regular flow of clients, the chance is generally lower to the investor. If your company is either seed or early stage, you will be needing an investor who is more than likely a venture capitalist and specializes in high risk investments. On the other hand, if you are a company that is already established and needs bridge funding or expansion funding, you’ll need an investment firm or a personal equity firm that specializes in the later stages of a company’s life. What this means is that you will need an investor, who’s stage preference is either later stage, growth or expansion stage, or mezzanine stage. They’re usually stages of companies that are ready for a liquidation event, where the investors exit and make their profits. Which means that these companies could be either associated with a leveraged buyout or LBO, or a managed buyout or MBO. Mezzanine stage is each time a company is ready for mezzanine capital. This is actually the capital a company needs because it prepares for an IPO or initial public offering. That is also a liquidation event.

Geographic Preference

Geographic preference is just as important as an investor’s stage preference. Your company may fit an investor’s stage preference, but may very well not take the right geographic location that a particular investor might invest in. You can find different investors around the world and small firms might just choose particular geographic location, whereas some of the larger global investment firms will invest internationally. Other investors may invest in a whole continental area, for instance Uncle Vasya Ventures may invest in Eurasia, which would encompass Russia, Central Asia, the countries which make up the former republics of the Soviet Union and Eastern Europe and Aunt Valya Private Equity might invest only within continental Europe. When seeking an investor, you ought to find out where their geographic preference is. Sometimes this really is shown on the websites, and sometimes not. An effective way to figure out what geographic location an investor prefers is by looking at its portfolio companies and the countries where they’re located.

Industry Preference

Industry preference is equally as important since the both above mentioned preferences. Usually investors invest in the industries that their partners or portfolio companies have expertise in. When searching for an investor, you’ll need to consider the industry that you will be in and you wish to have an investor who has got the expertise in the same industry that you will be in. You could have a fantastic product, but if you are in the IT industry and you contact a VC firm that produces its investments in the pharmaceuticals industry, your executive summary will not be looked at.

Determining an investor’s industry preference can be carried out by first looking at their portfolio companies, and sometimes, a preferences are shown on investors’ website. If you appear at an investor’s portfolio, and see what the industries that the portfolio companies are associated with, you will get a view of what industry preference certain investor might have. It’s important that you find an investor who’s preferences meet your company profile.

Leave a Reply

Your email address will not be published. Required fields are marked *