Looking For Funding? Investors Are Out There

Is there really plenty of money out there to invest in small businesses

? YES, investors are looking for people who have the know-how to solve a real-life problem.

The University of New Hampshire Center for Venture Research estimates that U.S. angel investors committed $19 billion to 55,000 deals (about 35,000 small businesses) in 2008. So the investors are definitely out there.

But where do you look for them?

In 2009, Kevin Johansen created social networking platform The Business Catapult to meet the needs of entrepreneurs, investors and advisors.

Of course, just being listed in a social networking platform like The Business Catapult doesn't guarantee you'll get the funding or advice you need. Johansen recommends that you be prepared to answer the following three questions when you meet with potential investors:

* What's the problem you are solving? There are plenty of ideas out there. Does your idea solve a real-life problem? If so, what market research can you show that will prove your product can solve the problem?

* What expertise do you have to solve the problem? Just having a solution may not win the investors over. Demonstrate your expertise to solve this problem.

* How many other investors do you have in your funding funnel? Fill your investors' funnel with as many prospects as possible.

Johansen is a serial entrepreneur who built and sold two businesses prior to creating The Business Catapult. He advocates networking to cultivate funding sources. "Serial successful entrepreneurs cultivate a regular presence in appropriate professional associations, business incubators, business schools in colleges and universities, and other types of organizations that attract investors," Johansen says.

"Building better business faster" is Johansen's mission. He also advises that entrepreneurs:

* Get customers first. Don't spend top dollar and time to get patents and copyrights before finding out whether anyone will buy your product or service.

* Take care of your customers. You work hard to acquire your customers; take care of them. They are the only reason you're in business. Do whatever it takes to retain them.

* Focus on your priorities. Stay focused on the priorities you set for the business, with proper structure and systems.

There's plenty of investor money. Have you done your homework to attract it? Consider to revisit your business model which includes three major components: 1) business purpose 2) core competencies and 3) profit formula. With the clear business model the "go-to-market" will be apparent for your investors even lenders to visualize. Along with your track record to back up how you will execute your plan. Remember the investors or lenders don't want to take any more risk if they don't have to.

by: Chia-Li Chien

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