How To Find An Investor In South Africa
It’s exciting to launch a business. However, keep in mind that not all of the initial capital needs to be provided by the company’s owner or by way of a traditional bank loan. There are ways to relieve some of the pressure on your finances, such as hiring investors who only get paid when the business is profitable or taking out loans with reduced interest rates.
What Qualities Do Investors Seek?
When deciding whether to invest their own money or the money of their company in another business, investors take a lot of factors into consideration. Examining a company’s includes looking at its:
- Idea or item (is it original? Are the characteristics unique if not? If not, why is this going to sell?
- Plan of Business
- Team of managers (does senior management have one?
- Possess the training and experience necessary to accomplish the goal?
- Financial information, such as:
Profit statement
Proof of account
Obtaining Investment
Ask your family or friends for money
This might be the simplest and most economical approach to raise capital for your firm. Discuss the requirements of your company with your family and friends. Choose whether you merely need a loan from them or investing capital. For both parties, a loan might be the simplest option because you can simply repay it over time and with interest.
A financial investment entails that close relatives or friends would take a stake in your business and bear some of the risks. In contrast, if you make an investment, you might be able to get more cash up front and, unlike a loan, you won’t have to pay it back over time. Only if your company becomes profitable will investors receive their money.
Think about private investors
“Angel Investors” and “Venture Capitalists” are the two primary categories of private investors. They typically receive company shares in exchange for their investments.
Investors’ time frames
Angel Investors
An angel investor is a wealthy person with the capital, connections, and expertise to launch a successful business. There may not be a need for additional investors if an angel investor joins the team because he is likely to contribute enough. Angel investors, however, always anticipate a high rate of return on their investment. Furthermore, the business case needs to be solid if you want them to invest in anything.
Angel investors put their own money into the market and typically arrive at the start of a business. When an angel invests, he becomes a shareholder in the business. Together with angel investors, Amazon and Apple were able to launch.
Entrepreneurial investors
When a business is growing and possibly considering a riskier venture, venture capitalists are required. Investors’ funds, not the venture capitalists’ own, are used.
Venture capitalists can assist a startup, but they usually invest in companies that have already been established, have a strong management team, and have a track record of success. That company now needs money and has a change management strategy. In actuality, its newThe right product or service may potentially change the game.
Reach Out to Companies or Institutions in Your Field of Study
You probably already know people who work in a field related to yours. Maybe you may get in touch with them to ask if they know someone who could be interested in investing in your business
You might spend a lot of time conducting research because it’s doubtful that you’ll locate an investor after making just one phone contact. In order to network, you might even need to make a lot of phone calls or go to trade shows. But if you keep looking, you might come across that one person who likes your product or business plan enough to invest in it.
Utilize crowdfunding websites to look for investors.
Through a website that focuses on the specific kind of money required, a crowdfunding platform enables an individual or business to obtain funds online. Let’s examine a few of the various sites for crowdsourcing:
Crowdfunding with incentives
Here, donors are requested to donate relatively small sums of money in exchange for a reward from the startup.
