Regardless of your business size, it may be that it needs funding and investment at some point. Whether it’s to get the business off the ground, or to move to the next stage of its operations, expand or diversify, you will also need some financial attention.
It is possible for businesses to fund themselves, spending revenue on improvements or expansion. But if the business doesn’t have the funds on hand, and is not ready to take out a loan, the business owners can always appeal to investors for a cash injection.
You should remember that business investment is a broad term, encompassing a range of different approaches. Among the most notable ones you should know about include venture capital, flexible business loans, equity crowdfunding, business expansion funding, and export invoice finance, to mention a few.
In a nutshell, a venture capitalist lends capital to businesses and startups in exchange for a certain percentage of equity in their business. Angel investment, on the other hand, comes from an affluent individual, mostly an entrepreneur themselves, to a startup or growing business. Angel investors can decide to receive an ownership stake in the business in which they’re investing or receive return plus interest from the business profits.
So, how can you find business investors? If it’s investment from funds held by the company, a business investment account can be useful. These are instant access savings accounts that allow interest to be earned until the funds are withdrawn. Cash can then be transferred to the main business account to be directed into the investment required.
To cut a long story short, investors want business investment opportunities that guarantee a good return on their investment, either in the form of repayments with additional interest, or income, such as a profit share or dividends.
The choice of an investor depends on what works perfectly for your startup. Businesses at different stages of development will benefit from different types of investment. But individual business owners should also work out whether they’re ready to give up stakes in their business or pay different interest levels.
