Make sure the investor you are about to approach is a good fit for your company. Are there any conflicts of interest you should be aware of?
Also get a broad understanding of the investment market. Who is out there? What do they do?
Most small businesses hire a broker to prepare an IM (information memorandum). This outlines your investment opportunity covering what industry you are in, your current stage of funding, appropriate types of investors and a ‘tease’ about the opportunity for an investor.
Don’t send your full business plan to every investor. Work with one investor best suited to you.
Before you do this, check they are a good fit. You could visit their website and see what they are up to. Investigate:
- who they have invested with in the past
- conflicts of interest
- how much money they have invested
- the types of businesses they like investing in
- the management of their investment company
- their skills and interests.
