6.6 How to Look for Investors
Tip
Consult the
Managing for Business Success website to access comprehensive directories of Canadian companies
or organizations that support small business and provide advice on any subject related to business
management.
The investment community is large, fragmented and dispersed. There's
no simple way to find the money you'll need. Instead, you'll have to
use personal contacts, investment professionals, industry and local
organizations, libraries, business media and the World Wide Web.
The successful experience of one Canadian firm
shows one way that the match can be made.
Start Close to Home
Let people know what you're looking for. Network effectively. You should
exploit, to the maximum, your business and personal acquaintances. Try
to contact anyone who can give you meaningful introductions or referrals.
- Discuss your intentions with professionals who serve your business.
Your lawyer, banker, accountant or financial advisor may be aware
of investors. If not, they may be able to put you in touch with professionals
who are active in investing.
- Join investor associations to expand your network and to find a mentor.
- Hire a financial advisor with expertise in venture capital.
Expand Your Network
Valuable contacts can be made through:
- local Chambers of Commerce;
- industry associations;
- local and regional business development organizations; and
- investor associations.
Look for Referrals
Use your contacts or approach known players in the venture capital
market to get referrals and advice. You can always get their advice
without soliciting their investment.
Use the Media
Do a media search for news articles (again, your library can help).
Follow reports of completed deals. Keep your eyes open for advertisements
about investors showing an interest in investing.
Consult Directories and Associations
Tap into your own industry or professional association for advice and
information about how others in your field have grown and who helped
them move ahead. And look into local sources of information — many
municipalities now have entrepreneurship centres or economic development
units that maintain up-to-date, accessible libraries of directories,
associations, industry listings, business and other networks, and so
on.
Get Out in Front of Investors
Attend trade shows, conferences and investment forums. These are excellent
venues for cultivating your network and developing contacts. Consider doing a
presentation and setting up a booth at such events. It's a good opportunity
for exposure and for advertising your business venture.
Here's a story about how it worked for one entrepreneur.
Use the Web
The Web can be a great place to search for investors. Here are some
links to get you started.
The Canada Community Investment Plan
The Canada Community
Investment Plan (CCIP) provided communities
outside main financial centres with the information and tools
they needed to start and operate an investment facilitation service
for their fast-growth small and medium-sized enterprises (SMEs).
The best practices and lessons learned by 22 CCIP pilot projects
are available through key documents.
back
Bfound.com Found an Angel
Bfound.com's owners found that finding the right investors
can be a long process. But they used a local business development
agency, some good self-promotion, a well-focussed investment
proposal and perseverance to land their angel.
During Bfound.com's search for financing, management team members
attended an industry trade show where they received a lot of
interest and some good feedback, and were able to meet their
competitors for the first time.
They worked with VIATeC (the Vancouver Island Advanced Technology
Centre), a non-profit industry-led association to help identify
possible investors. VIATeC suggested that they needed an angel
since the company was lacking experienced management and focussed
vision. Bfound.com's owners wanted someone who had been through
the process of growing a company before — they didn't want love
money; they wanted someone who could help.
The company prepared an executive summary outlining the investment
opportunity. VIATeC filtered the angels for them to ensure that
the company would be matched with someone who could help.
For the first round of financing, VIATeC circulated Bfound.com's
Business Opportunity Document to three investors, one of whom
was a good match.
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Seeing and Being Seen:
A Fictional Account of Finding Potential Investors
Dorothy Doyle designs non-violent computer games, geared to primary school
aged children. The games are fun learning tools. Her company is DD Games Ltd.
Her products are quickly gaining exposure in local schools. These schools are
prepared to endorse a number of the games and integrate the games into their
curriculum. With this kind of support Dorothy is confident that she can
market her product nationwide, if not beyond.
Recently, DD planned a nationwide marketing program to start one year down the
road. This expansion plan was massive. DD Games needed a major cash infusion.
With her usual foresight, Dorothy began to nurture prospective
investors well in advance. Dorothy wanted inexpensive exposure
and the opportunity to network. She identified two scheduled
computer software trade shows: one local and one out west. She
bought booth space and got time slots to do a presentation.
Dorothy diligently prepared for these two events. Her speech
highlighted the growth potential, successes to date, the endorsements
and ideas for new hot products. She prepared attention-grabbing
visuals. She dubbed herself "Quarterback of a winning team."
During her presentation, she tossed out souvenir footballs;
printed on each was "DD Games."
Following these two events, Dorothy is now talking seriously to three
potential investors who contacted her after her presentation. They are
discussing the required capital, DD's targets and marketing plan.
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