Steps to Growth Capital Fast Track

Finding Potential Investors

Who are Potential Investors?

There are many different types of risk capital investors. Each one has different characteristics.

Love Money

Family and friends are important sources of capital in the early stages of business development.

 

Angel Investors

These individual investors may want to be silent partners, or they may want to be actively involved in the business by contributing their experience and know-how.

 

Venture Capital Firms

These companies are managed by professional venture capitalists and typically have particular investment strategies or preferences.

 

Institutional Investors

Pension funds, life insurance companies, banks and other institutions also provide risk financing.

 

Government-Backed Corporations

The Business Development Bank of Canada and others provide equity financing as well as counselling, training and mentoring to small businesses.

 

Corporate Strategic Investors

Major corporations sometimes invest in smaller companies when they're looking for strategic partnerships.

How Do You Find Them?

"I had already started contacting people while I was working on my business plan. I'd done years of networking."*

Networking

• business and personal acquaintances;
  
• professionals who serve your business; and/or
  
• a financial advisor with expertise in venture capital.

Valuable contacts can be made through:

• trade shows, conferences and investor forums;
  
• local Chambers of Commerce;
  
• industry associations;
  
• local and regional business development organizations; and
  
• investor associations.

"The first time I saw our lead investor was at a meeting with 150 people. When I heard he was going to be speaking, I registered for the seminar. Afterwards I introduced myself — you can't be passive and wait at the back of the room — I told him what I was doing and gave him my card. He probably doesn't remember it, but he was pleasant about it."

Media and Associations

Other possible sources include:

• the Internet;
  
• news articles on investment deals;
  
• professional and industry directories and listings; and
  
• local entrepreneurship centres or economic development units.

"When I contacted potential investors I tried hard to get to know them. I just stated my case in a very casual manner, I didn't try to pitch them. I tried to ask intelligent questions and get to know about them. That helps later on. Then I'd ask permission to forward my business plan in the future."*

Who Should You Target?

Find investors whose criteria match your situation. These are the key areas to look for common ground:

Action Items

Use our Finding Potential Investors Checklist to help you find investors that are right for you.

Consult the Sources of Financing web site to identify possible contacts.

* All quotations used with permission of Chris Griffiths, Griffiths Guitars International, St. John's, Newfoundland, Canada.

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