Use These Sources To Raise Capital For Business Investment
- BY Jaspreet Kaur
Feature Writer, BusinessEx
- Mar 20,2019
- 10 Mins Read
Entrepreneurs commonly try to raise the business from the bottom to an edged-tycoon status. The rate of attaining the aforementioned business status amidst the business owners is quite low as the initial five years of the startup are grappling ones. According to an amalgamated study of IBM (International Business Machines Corporation) and Oxford Economics, most of the ninety-percent startups fail in the first five years, as reported by the Indian daily news, Inc42.
There are various reasons why companies shut off. However, the primary reasons for the closure are an inability to raise funds, lack of mentorship and lack of innovation. Commonly, finding investment is difficult for entrepreneurs, especially for the first time entrepreneurs.
Finding The Right Sources For Investment
In an entrepreneurial journey, a business plan comprises 20 per cent share whilst the business investment comprises almost half of the share. Funding is the crucial step while establishing the business as the business cannot kick-off without it. For industrialists who are active members in the business ecosystem, finding the fundraiser is easier as they have access to a nexus of investors.
On the flip side, the first-time businessman or entrepreneur-to-be grapple in finding the right investors.
- Close Friends
“A friend in need is a friend indeed.” The quote precisely describes the scenario when a businessman seeks money. Approaching the closed ones is an apt option if one’s relationship jellies up with the closed ones.
At the time of borrowing the money, it is imperative to state the conditions of repayment and plus, interest so that there will be no confusion or misinformation on both the ends.
- Angel Investors
Approaching the angel investors is another option that the entrepreneurs can think of. In the business ecosystem, angel investors are legit investors which can easily escalate the business by endowing the money.
In order to seek the help of investors, the entrepreneur-to-be needs to build an accurate business plan along with an amazing business idea. If the angel investors find the business idea workable then they approve the business plan and subsequently, endow money in the venture or else they reject the plan.
A family is a foremost unit that helps an entrepreneur in establishing the business. Aside from the monetary help, the family inmates can facilitate the entrepreneur in executing the business as well.
Perhaps, a positive relationship with the inmates is imperative so as to get a considerable amount of money for the business.
- Private Investors
For seeking a large scale investment, the entrepreneur can approach private investors. For knowing private investors in a certain region, the businessman can visit network events or connect private investors via references.
Similar to angel investors, the private investors also reflect on potential and future prospects of the business and then, take decisive action regarding the investment.
These sources are the precise elements that the business owners should look for while seeking investment. By plunging deeper in the market, the business entrepreneurs will learn about other investment sources as well.
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