After much research and plans for your business, the next thing is look for an investor.
The concept and objective of your business determines the type of investor you can approach.
One such type of investors is the Angel investors. They are keen on young entrepreneurs with great ideas and unique start-ups that are still in its early stages.
It is advisable that you prepare a working prototype of your business. This gives the investors a real experience of your idea. It also helps them to visualize your plans.
Even though finding an investor puts you in their playing field, it is important that you evaluate them. As it is your business, you have the responsibility to ensure that the investor is interested in your business.
Here's a list of questions you may want to ask your potential investors;
1. What other types of business have they invested in? When was the last time they invest in one? How long was their investment period? : Do not worry about these questions sounding intrusive. You have every right to find out if the investor has experience in dealing with your chosen business and a track record of healthy investments under their belt.
2. What qualifiers do they look for when picking a business to invest in? : Does the company prefer to invest when the business is in its beginning, middle or mature state? Is your chosen industry interesting and worthwhile to them? This is where you determine if you are a good fit for them and most importantly, if they are a good fit for you.
3. How can they add value to your business? : Most Angel Investors are known for providing free and consistent advice as you grow your business. Be clear on the level of involvement and influence the investor can have on your business. You want to avoid situations where you lose your position and status as owner and CEO of your company unless it is part of your exit strategy.
4. How many fund cycles are they willing to put in? : Some investors prefer to invest one time and get their returns after a few years. Others do several cycles for a longer period for higher returns. You just have to determine if they are on the same page with your business goals.
5. What is their exit strategy? : This is similar to point 4 but focused specifically on how the investor intends to exit and what their average time frame is. See if their strategy is in line with yours.
6. Do you have to pay them to do a presentation? : Most Angel Investors allow you to do a presentation for free but a quarter of them require a fee. Some of these fees are about US$600 so it would be best to have this sorted out first.
Remember that during the entire process, the investor will be evaluating you. As it is your business at stake, you should be doing everything you can to interview and evaluate them as well.
Know your business plan well and most importantly, the type of investor you want involved with your business and you will have the right questions to ask.