How to Find Investors for Your Business: A Step-by-Step Guide

How to Find Investors for Your Business: A Step-by-Step Guide

How to Find Investors for Your Business: A Step-by-Step Guide

If you’re a startup founder, coming up with the idea for your business might feel like it was the easy part. Even if it took years of late nights, rounds of revisions, and countless starts and stops, you did it. Maybe you’re doing it right now. 

Either way, your idea has probably always felt like it was within your control. Even if there’s a team of decision-makers involved, you all are still calling the shots. If you want to change something, you do. When something isn’t working, you scrap it. Why? Because you’re in charge.

Finding people to invest in your business can feel the exact opposite. All of a sudden you have what seems like little control over whether or not they like your idea – much less when or if they decide to invest significant amounts of money into your business. Ultimately, it can feel risky – but consider this quote from Susan Wojcicki, CEO of YouTube:

Life doesn’t always present you with the perfect opportunity at the perfect time. Opportunities come when you least expect them, or when you’re not ready for them. Rarely are opportunities presented to you in the perfect way, in a nice little box with a yellow bow on top. Opportunities, the good ones, they’re messy and confusing and hard to recognize. They’re risky. They challenge you.”

That tension between control and risk is real, but it doesn’t have to overwhelm you. When done correctly, finding people to invest in your business can be one of the most exciting parts of your job. This step-by-step guide will help you get started, teach you how to build strong investor relationships, and implement strategies that work. You may not be able to control everything, but that doesn’t mean you can’t control some things.

Why Small Business is Big

There’s some good news for entrepreneurs and startup founders right out of the gate: finding investors and raising capital for a small business can be easier than for larger, more established companies. Here are three reasons why:

  • A Little Money (Goes a Long Way)

While a big company may not even accept investments below six figures, $10,000 might be a gamechanger for the life of your startup.

  • Lower Barrier to Entry

Not every investor can write a million-dollar check. However, finding ten people willing to invest a few thousand dollars apiece is significantly easier.

  • Higher Risk = Higher Reward

Investors are diverse and include those that specifically enjoy higher risk/higher reward partnerships with new startup founders. They do exist. You just have to find them. 

How to Find Investors for Your Business: A Step-by-Step Guide

How to Find Investors for Small Businesses – The Top 5 Ways for a Startup to Get Capital

Okay…that was encouraging, right? We think so. Still, success takes more than a pep talk. You need practical steps. With that in mind, here are the top five ways to find investors and raise the capital your business needs.

Begin By Asking Your Family and Friends

Wait…before you throw your phone or break your mouse, you should know something important: we’re not suggesting you ask to borrow any money here. If that’s what’s causing you to cringe at even the thought of discussing this with your family or friends, think again. 

This is not a loan. This is an opportunity to invest – to make their money back and then some. After all, the people you’re closest to know you better than anyone else. They’ve seen your drive, they know your dedication, and they believe in you. In turn, you believe in yourself and your idea. Asking your friends and family to invest is a way of inviting them to be active participants in your dream and recipients of your success. You can feel good about that.

Apply for a Small Business Administration Loan

Unlike your family members or close friends, the Small Business Administration doesn’t get involved with investing, however, they do provide loans for qualified applicants. One of the most advantageous SBA options for startups is their microloan program. While the average microloan is around $13,000, the program provides loans up to $50,000. 

Before you apply, be aware that loan proceeds cannot be used to purchase real estate or pay existing debts. However, that means you’re free to rebuild, re-open, repair, enhance, or improve your small business. That includes expenses associated with inventory, machinery, furniture, fixtures, equipment, supplies, and working capital. A microloan may not give you everything to get your business off the ground, but it can be part of your financial plan.

Consider Private Investors

With the right group of private investors, it’s possible to raise all of the capital needed to launch and grow your startup. We’ll provide more information below to help you understand what these investors are looking for – allowing you to tailor your offering and maximize interest – but here are some basics to consider:

Before pitching your idea to an investor or venture capital group, know the amount of funding you need, and be prepared to explain what that money will allow you to accomplish. Then, make sure your pitch is polished and practiced. After that, do your research. Are there local VCs you can meet with in person? Do you know of an angel investor you can reach out to? Put the internet – including LinkedIn and other online networking sites – to work for you. 

Contact Businesses or Schools in Your Field of Work

Sometimes finding an investor is as simple as a meeting over coffee. At other times, more steps are involved. Building a solid financial foundation for your business will require some of both. If there are businesses or schools nearby that focus on or specialize in work that overlaps with your product or idea, get to know them. 

Discovering an investor in either group isn’t a guarantee, but both businesses and schools have large networks – groups that are sure you include people interested in what you’re doing. You may also find connections you hadn’t expected, like manufacturers, suppliers, and other small business owners who may help you advertise, stock your products, or recommend you to their customers. 

The natives of Silicon Valley learned long ago that when you share your knowledge with someone else, one plus one usually equals three. You both learn each other’s ideas, and you come up with new ones.” – Vivek Wadhwa

Try Crowdfunding Platforms to Find Investors

There are good reasons crowdfunding platforms have grown in popularity: they tend to produce results. Some caveats exist, of course, but online crowdfunding – like SBA loans and angel investors – can be another exciting piece of the fundraising process. Understanding your audience and what will compel them to act is critical. 

The crowdfunding campaigns that succeed all have a few things in common: 

  • an attainable funding goal 
  • more than one investing level or tier 
  • direct incentivization

Although the individual investments tend to be much smaller (anywhere from $25 to several hundred dollars), more people – especially those who might not consider themselves to be investors – can participate. This can build positive buzz and a sense of excitement that may very well draw the attention of even larger audiences and bigger investors. 


Frequently Asked Questions

“What Do Investors Look For?”

The first thing investors look for is an engaging story, which is why your pitch is so important. Your pitch is more than a mission statement, a series of bar graphs, or a prototype. All of those pieces may be included in your company’s story, but in a way that tells a story – one that draws an investor in and compels them to act.

Beyond that, investors look for founders who are bold, but who remain teachable in the areas outside their expertise. Investors want opportunities to make an impact – in other words, to feel like their money is making a difference. They also want to know that their questions – which they may have many of – will be answered thoughtfully and that any insight they might have will be taken into consideration. 

“What Is a Fair Percentage for an Investor?”

The answer to this question varies depending on how much someone is willing to invest. On the low end, an investor gained through a crowdfunding platform may become eligible for a substantial discount once your product hits the market. In the meantime, you may choose to outfit them with free branded products, like stickers, a t-shirt, or access to an exclusive online community. 

Angel investors or VCs aren’t nearly as motivated by swag. Building a working relationship with this type of investor will likely mean trading a percentage of ownership in your company for a significant infusion of capital. That percentage could be relatively small – perhaps 25% – or it could be full ownership, making you an employee. Having a plan, knowing what you’re willing to do, and sticking to your strategy will help you navigate each opportunity.

Finding Investors for Your Business: A Recap

Discovering, meeting with, and successfully onboarding new investors for your startup doesn’t have to feel overwhelming. It can be one of the most rewarding aspects of being an entrepreneur or founder. Family, friends, and private investors can all be part of your funding plan. You may even decide that a small business loan is needed, or you might put the power of crowdfunding to work for your startup. No matter what, you need a plan – one that begins with a great story.

Great stories are what get all of us to lean in a little closer, listen with more interest, and imagine ourselves getting involved. Here’s how we can help you tell your story in ways that matter most.

Putting The Main Stage to Work for You

The Main Stage is built around the things startup founders and business creatives need most: 

  • A platform for designing and sharing beautifully made pitches that draw a crowd
  • A built-in software that makes tailoring emails and managing investor relationships easy
  • And a secure document vault for storing investor-related correspondence

The Main Stage is the future of fundraising and now is your chance to join us. If you’re ready to get started, we’re ready to help. Click here to sign up for a free 14-day trial. 


Aishlin Harrison is the co-founder of The Main Stage, as well as an artist, musician, and passionate entrepreneur. In addition to these roles, she serves as Creative Advisor for RedCrow™, Inc., a direct investment and marketing platform for healthcare companies. You can connect with her on LinkedIn.

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