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. 

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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.

15 Habits of Effective Leaders

The Mainstage - 15 Habits of Effective Leaders

The Mainstage - 15 Habits of Effective Leaders

As buzzwords go, “leader” gets used a lot – and overuse, if nothing else, makes it easy to forget that the word means something. Leadership is specific. It carries with it some unique requirements. Anyone can be a leader, but not everyone is a leader.

The other problem is that we tend to think about leadership all wrong. We bifurcate businesses into Leaders – typically the founder or CEO – and Everyone Else. The truth is that a lot of us are leading in one way or another – from inner-office teams to volunteer work outside of the office. The trick is in learning to lead well.

Almost all of us have worked with an ineffective leader at one time or another. While that can be an education in what not to do, it’s important to focus on, think about, and remind ourselves of the habits effective leaders share in common. As we launch business ventures and build brands, it helps to have a blueprint for leadership. This is less a question of “who” you are and more a matter of “how” you are. How do you lead well? Here are 15 ways:

The Mainstage - Habits of Effective Leaders

1. Leaders Take Responsibility

To maximize their effectiveness, a leader can’t possibly be responsible for each facet of an organization. That’s what a team is for. Nevertheless, they remain responsible to their customers, colleagues, and shareholders. A solid leader won’t shirk that obligation, and you’ll never catch them throwing another team member under the bus – even when they have to deliver bad news. Effective leaders take responsibility.

2. A Leader Sets Ambitious – but Realistic – Goals

Having a goal – or even several goals – is like a north star. It’s a way to avoid getting lost in the distractions of the day, week, or quarter. Leaders set goals to maintain focus, measure progress, and celebrate achievements. They review their goals often to remind themselves why each one is important – because a goal is about more than “what” they’re after. The goals that leaders set are attainable, but rarely without hard work, commitment, and maybe even a few breaks along the way.

3. Leaders Never Stop Learning

An effective leader is rarely the smartest person in the room (a point that is reinforced below). They tend to surround themselves with people and opportunities they can learn from. In the book Teaming: How Organizations Learn, Innovate, and Compete in the Knowledge Economy, Harvard Business School Professor Dr. Amy Edmondson explains it like this: “Learning is not a one-time event or periodic luxury. Great leaders in great companies recognize that the ability to constantly learn, innovate, and improve is vital to their success.” Whether it’s from books, podcasts, conversations with colleagues or mentors, or through their own research, learning and leadership are inseparable.

4. A Leader Does Hard Things

From the outside, it’s possible to look at some of the leaders we admire and imagine their life is comparatively easy to the things we’re facing. This may be especially true if they’ve achieved some of the success we’re still working towards. Here’s the reality, though: all leaders do hard things – from negotiating a merger to parting ways with a longtime employee. The best leaders understand that hard decisions, difficult conversations, and uncomfortable moments are part of the gig. They don’t shy away when it comes to hard things.

5. Effective Leaders Schedule Downtime

Because work often does require early mornings, late nights, and a tremendous amount of bandwidth, effective leaders know their time, energy, and attention are infinite resources. That’s why they schedule their downtime – and not simply when it’s convenient. Our jobs will almost always expand to the hours we give them, so creating opportunities for rest, exercise, vacation, and time with family and friends is vital. A good leader knows that work will still be there when the workout, getaway, or dinner date is over – and they’re better because of it.

6. Leaders Know Their Story – & How to Tell It

Effective leaders know the work they do – just like the life they live – is a story. And just like any book worth reading, their story isn’t without ups and downs, joy and grief, and ultimately a reason (or reasons) for getting out of bed each morning beyond the temporary thrill of a paycheck. They’ve also honed their story and can tell it in a way that engages the people listening. If work is what a leader does, their story is why they do it. At The Main Stage, our Story Vault™ platform helps business leaders (and new leaders in the making) learn how to tell their stories in powerful ways that connect with their intended audience.

7. Effective Leaders Have Mixed Motives

Okay…we promised that this one might shock you, and maybe it already has. Let me explain. Effective leaders understand that no one is entirely altruistic. They’re suspicious of people who claim to be. Instead, leaders are upfront about their drives and desires. They may have created a life-saving product, but their idea also allows them to earn a significant income. More than one thing can be true at a time. New York Times bestselling author and Business Made Simple CEO Donald Miller writes in the book Hero on a Mission “…that when it comes to figuring out what kind of story we want to live, we should look for something that is mutually beneficial. If it sounds like I’m saying to live a life of mixed motives, it is because that’s what I’m actually saying. I don’t believe you will ever have entirely pure motives. If you say you do, I don’t believe you and don’t believe you are self-aware.” Effective leaders know this to be true. They don’t project completely pure motives, but neither do they exploit people and opportunities for their own advantage. They find mutually beneficial solutions.

8. A Leader Acts

Given the option to sit this one out or step into the action, leaders don’t hesitate to act. They know their strengths and weaknesses and affect positive change whenever and wherever they can. Does this mean effective leaders always act? Not at all. One aspect of leadership is knowing where one’s time and resources are best utilized. Still, a strong leader is prepared to act. Because of that preparation, it’s difficult to catch them off guard.

9. Leaders Practice Listening

Because effective leaders are so often in action, they recognize the need for stopping, sitting still, and hearing from the people around them. This, of course, requires some humility. At its core, listening is an acknowledgment that the speaker knows something the listener does not. Just like any other skill, listening has to be practiced to improve. Leaders get this. They receive feedback, hear from their teams, and seek to understand perspectives they may have otherwise missed.

10. An Effective Leader Manages Their Emotions

We’ve probably all experienced the kind of day that swings from good to bad somewhere between 10 AM and 2 PM. Some days may even go back and forth several times before you’ve had the chance to catch your breath. Effective leaders take this in stride. They understand the market will fluctuate. They expect obstacles and pushback. What leaders don’t do is blame people, play the victim, complain, or turn over desks. They may feel all of those emotions, but great leaders have learned how to effectively manage each one.

11. A Leader Chooses Performance Over Posturing

In our world, posturing grabs headlines, gains followers, and gets clicks. If attention is the end goal, there’s always a photographer or a chyron waiting to break the latest news. An effective leader chooses the daily grind of performance over the glitz of merely talking a big game. In business, they’re intentional about developing that same mentality in their organizations. When leaders perform, they create results. They understand that posturing can’t compete with a tangible track record.

12. Effective Leaders Offer Public Praise (& Private Criticism)

The best leaders elevate the people around them. They may choose to do so verbally, and they often make a point of doing it in front of others. Authentic public praise motivates and builds momentum – and it just makes people feel good. Effective leaders never withhold praise, and they don’t take all the credit for success either. At the same time, a good leader makes a habit of addressing problems in one-on-one moments. They don’t look for chances to publicly embarrass people, and they know criticism is likely to be received better in private.

13. Leaders Hire People Smarter Than Themselves

While fearful leaders look for employees who will fall in line and not rock the boat, effective leaders recruit and hire people who know more than they do. Pushing past the limitations of ego, an effective leader assembles teams of subject matter experts. It’s by harnessing those skills and strengths that some organizations scale so quickly. Leaders still cast a vision and work together to build a cohesive strategy, but they grow by empowering (and trusting) smart people to build an even smarter company.

14. A Leader Sets an Example That Others Can Follow

An effective leader refuses to say one thing and do another. They intuitively understand that hypocrisy will destroy a business from the inside out. Instead, they make a habit of showing up and following through. Solid leadership doesn’t operate on two sets of rules – one for the leaders and another for everyone else. Instead, their expectations for themselves and their organization are identical. Because of that, each team member has a clear example to follow.

15. Effective Leaders Build Other Effective Leaders

Ask any effective leader who has inspired them throughout their life and the answer might surprise you. There’s a good chance it’s someone you or I have never heard of – a parent, coach, teacher, or old boss – but whose impact looms large. The best leaders inspire others to lead – and to lead well. An effective leader realizes early on that their time on this planet is limited. They’ll only have so many years and so many opportunities within the time they get. Because of that, they work hard to leave a legacy behind.

The Bottom Line

Effective leaders are human, and few if any get all 15 of these points right every day. Do great leaders lose the plot sometimes? Of course. How could they not? But they never stay lost for long. As the story of your company grows, I hope these habits will inform how you lead. If one or two resonated with you, drop me a line (links below) and let me know.

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If you’re ready to lead your startup with the right story and the performance to back it up, we’re eager to help. Press the home button above to learn more or start your free 14-day trial. The future of fundraising is here – only at The Main Stage.

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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.