I’m frequently asked this question from our entrepreneurs, “How do I raise capital given this economy?” There’s a lot of anxiety surrounding it, but don’t worry, options are available. Even though the banks have pretty much cut back their lending, and investment bankers are sitting on the sidelines, there will always be entrepreneurs. In fact, there are more entrepreneurs created in times of economic crisis.
For example, a senior executive loses his job. He has a highly skilled experience. Has some savings. He’s got a great idea, and he’s always wanted to be in business for himself. There, a new entrepreneur has just been born.
On the other hand, there’s always the investors. Those business-person seeking opportunities to enter into a new venture, or professional investors that run just like any other company, and they are in the business of providing capital.
The problem is to match the deal flow. How does an entrepreneur or capital seeker get in front of their ideal investors? How can an investor get access to the investment opportunities?
As a capital seeker, what you need to do is to develop a strategy. You need to be able to package and provide your deal criteria and capital requirements, convey those to a targeted audience of capital providers, and one of the ways that you can do that effectively is through referral or introduction.
There are 5 key types of individuals who can introduce you to your targeted investor / funder:
- Entrepreneurs whom your targeted investor has previously backed or is currently backing;
- Other investors with whom the targeted investor has co-invested;
- Lawyers, accountants, consultants and other professionals;
- Angel Investors and Board Members;
- Your targeted investor’s online social networking friends / colleagues.
*Key Point – assembling your Board of Advisors to broaden your reach.