Investors – 13 Ways On How To Find Investors

Many business owners need investments for Start-ups and to grow existing business entities.Unfortunately, lack of or poor investor choices are one of the main reasons that cause 90% of startups to fail. Once you have an idea, you need to know how to find investors to actualize your idea. As a business owner, you can draw up investment from various sources. There are some key aspects that influence the type of investors you get. They include:

  • The amount of investment you need
  • Location of your startup or business
  • The type of business
  • The growth stage of your business
  • Potential profitability of the investment. 

The process of finding the right investors can be challenging. A successful process relies on factors like:

  1. Quality of your idea
  2. The quality of your pitch
  3. Quality investors. A quality investor preferably works in the same industry as the investment.
  4. Adequate research
  5. A realistic  business plan
  6. Due diligence

How To Find Investors

1. Bootstrap

Bootstrapping should be your first option. It means you have to rely on your existing resources to fund your venture. In other words, can you invest in your own venture? Bootstrapping has its advantages and disadvantages. The main advantage is that you will have total ownership and control of your investment. All the profits will return to you if you choose to bootstrap fully. 

You can decide to bootstrap if you have the resources, or if you cannot find the capital necessary to get started. Another major advantage of bootstrapping is that you will not get into debt. 

However, bootstrapping also has its disadvantages. The main one is that your personal resources may be limited especially when the venture grows. Thus, you may have to source for investors externally at some point. Another disadvantage is you may not get the market and industry exposure that comes with investors. 

2. Friends And Family as investors

Many business founders have found investors in friends and family. These individuals believe in your ideas and are also driven by the fact that they want you to succeed. Family and friends investors usually don’t get involved in daily operations of the business which could be an advantage.

However, in most cases these investors partially understand or do not understand the risks involved. This can be a major disadvantage and can cause tensions and stress in your relationships. At some point they will want their money back and can grow anxious about it. 

3. Private Equity Firms as investors

You can also find investors in private equity firms. These firms will offer their investment in exchange of ownership or shares of your business. The main advantage of using private equity investment is that they are easier to get  as opposed to public investments. Furthermore, your business shares will not trade publicly. Private equity investors are involved as limited liability partners or general partners. 

General partners have full liability while limited liability investors have limited liability in the company equity. A general partner can operate and execute the investment. 

The main disadvantage of private equity investments is that market forces do not influence their valuations. However, these forces influence the valuations in public entities.  

4. Crowdfunding

Crowdfunding is one way investors make money online. It is an investment process that sources for investors from anywhere in the world. There are platforms that were created to facilitate crowdfunding. GoFundMe and KickStarter are examples of crowdfunding platforms. 

Members of these platforms are your potential investors. Investors do not get equity or get involved in day to day operations which is crowdfunding’s main advantage. Crowdfunding has contributed millions worth of investments for startups and businesses. 

5. How To Find Investors In Events

There are numerous fundraising and events that happen. Some are global, others national, and others local. You can even attend business webinars thanks to the current technological advancements. There are some best practices you can use to engage your contacts and build networks. We categorize these practises into before, during and after the event. 

Before the Event

  • Choose the event
  • Note the time on your schedule
  • Find out who is attending the event and identify potential investors
  1. During the Event
  • Get there on time.
  • Introduce yourself to the potential investors. You should introduce yourself to as many individuals as possible to help you build a wider and stronger business network. 
  • Learn the names of the contacts.
  • Note down their contact information.
  • Try to focus on investor needs. One of the most influential books in business How to Make Friends and Influence people by Dale Carnegie asks us to focus on other people’s needs as well. 
  1. After the Event
  • Remember the name of the contacts
  • Reach out as soon as possible
  • Comment on their social media
  • Try to schedule face to face meetings
  • Focus on how you can offer help. 

6. Incubators & Accelerators match startups to investors

Do you have a start-up idea that is promising in terms of growth, market performance, and returns? You can opt to find investors in incubators and accelerators. Examples of such programs include the Tony Elumelu Entrepreneurship Program and the GIZ SAIZ Investment Readiness Program.  Incubators and accelerators offer numerous benefits to your business. They include:

  • A high standard working environment
  • Quality industry connections
  • Business mentorship
  • Seed money. 

However, incubators and accelerators usually present some drawbacks. They include:

  • Seed money guarantee for the best ideas
  • There is a lot of competition for investors

7. Social Networking Sites

Social Media is a highly effective tool for reaching others including investors. Startups nowadays use its channels to find investors, test their products, and grow their market reach. Existing businesses use it to test products, service, and grow their market base especially with the help of influencers.   

You can gain social media dominance to reach investors if you:

  • Put up posts and status updates
  • Message potential investors directly
  • Get information on investors
  • Use the help of social media influencers

Some of the most popular social media sites to find investors include:

8. Venture Capitalists

Venture Capitalists are investors in the private sector. These investors have huge sources of funding from organizations, corporations, pension funds, and foundations. Biomedical and tech companies are the largest recipients of venture capitalists funding. 

Venture capitalist firms have an active role in startups. In turn, they will receive equity in exchange of their investments and provide guidance throughout a startup’s development. There are venture capitalist firms that invest in established business. This is why you will need to do adequate research before you settle for a venture capitalist. 

9. Commercial Lenders

Banks and other financial institutions can be a good source of investment. However, commercial lenders are more likely to invest in established businesses as compared to startups. Furthermore, they usually invest in the form of loans. Laws usually restrict banks from investing especially in risky businesses because they put their depositors’ and shareholders’ money at risk. 

They usually choose to finance establishing businesses because:

  • Existing businesses have assets that can serve as collateral
  • Established businesses have stability as compared to startups. 

When banks finance small businesses, they use the owner’s personal possessions as collateral. Examples of collateral would be home ownership, car ownership, or any other highly valuable assets. 

10.Angel Networks/ Angel investors

Angel networks are also investors in the private sector. People often confuse angel networks with venture capitalists, and Crowdfunding with angel networks.

Angel Networks and Venture Capitalists

These sources of investors are similar but very different. Angel networks usually invest in startups while venture capitalists mostly invest in established businesses. Venture capitalists will invest money from organizations, companies or foundations. Angel investors on the other hand invest their own money. However, they all make investments with a potential for high returns. 

Crowdfunding and Angel Networks

Crowdfunding and Angel networks also have some significant differences. Angel investors have to meet certain requirements to be able to make investments. They have wealth restrictions depending on your country. Moreover, angel investors can participate in the board of a business and day to day activities. Crowdfunding investors on the other hand, do not have wealth recistriction and cannot actively manage a business. 

You can find angel investors in:


11. Revenue-Based Financing

Revenue-based financing works a little like a loan and equity investment. However, it is not fully like either. Investors in revenue-based financing will offer you a capital investment. You will pay off this investment with a monthly percentage of your future revenues. Once you fully pay off the investment, the revenue you earn thereafter is fully yours. 

Revenue-based financing is a good option if you do not want to give away equity of your business. Furthermore, you will keep full control of your business. However, this type of investment will reduce the amount of capital you can reinvest monthly.

12. Government Loans

Governments offer loans especially to small businesses and startups in an effort to boost the economy. Research more about the lending options from your government. Some of the programs are lenient while others have some high interest rates. 

13. Venture Debt

Venture debt is a short-term financing tool. You usually have a maximum of three years to pay it off. However, the period depends on your source of debt. Venture debt investments are available to businesses that already have a venture. You will have to pay this debt off if your business makes profit or not. However, you do not give up any equity for this investment. 

It is a good source of investment on the short-term like making a one-time purchase, but it has its drawbacks. Some of the drawbacks can create a major negative turn for your business. It has unfavorable default terms. If you miss a single payment, the investors could liquidate or sell your business to recover their money. 



Financing and investments have some major risks and you need to take precautionary measures. Just because we have listed a source of investment or another major platform lists it, does not mean it is worth it. Employ the following precautionary measures:

  • Avoid using sources of investments that are less established. Examples include family and friends, angels, and private sources. 
  • Get professionals to draw the appropriate legal paperwork before you receive any form of investment. Ensure your investor agrees with and signs on these documents. 
  • Do not spend money that is not in your accounts. Most people get excited by promises of investments and end up making poor choices that lead to further problems. 
  • Relationships with family and friends can be ruined if they invest and your business faces hard times. 


In conclusion bootstrapping and equity finance most businesses. Venture capital investments are usually rare. You will need to provide guarantees or collateral if you choose to get a loan for your business. Ideas or business plans hardly influence business loans. Moreover, established businesses are more eligible for business loans as opposed to startups. 

Remember, family and friends is not a completely ideal way to find investors. Do you have experience on how to find investors? What are your thoughts on the above way? Please let us know in the comments below.  

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