Brie Austin

Private Investors

With a well written business plan completed, it’s time to get your startup funded.

(Published in Examiner Magazine)

While there are many types of funding sources you can, and should, pursue, you might just find the underwriter you need close to home.

Talk initially with friends and family. They know you; they trust you, so all you have to do is sell the idea, not yourself.

No never means no. As an entrepreneur you need to continually talk up your business idea. If friends and/or family won’t, or can’t invest, they may know someone that can. So when they tell you that “I like the idea but I’m just not in the position to invest,” you can extend the conversation: “I understand. But you think the idea is good, right?” When they tell you “sure,” then follow up with “Great! Perhaps you have a friend that might be interested?”

Everyone’s universe is larger than they believe it to be. Friends and family may have access to people that they never considered before, such as lawyers, accountants, etc. They need not take endorse your business; they could just do a simple introduction.

Successful businessmen/women in your area can be a source of funding if (a) they like your ideas and see you as a person capable of bringing those ideas to fruition, (b) see a synergy with your idea and their own business, (c ) have a pet interest in your industry segment , or, (d) all of the above.

A pet interest can come in many forms. If you were launching a business that was artistic in nature – such as music, film, photography, art, flower arranging, or design, for example – and your would-be investor had a yearn for that, or had a child interested in that, then the involvement by association might be stronger attraction to that investor than the actual success potential itself.

Lawyers and accountants have the wherewithal to get involved, personally, or as middlemen pitching your idea to a client – or group of clients.

Many investors exude a bit of superiority complex. After all, it is you that asked for their help. Thus, you not only need to be a creative thinker, you need to also be a diplomat. Though this point might seem trite, this can be the biggest hurdle when dealing with someone that has money to invest, but is not traditionally a professional investor.

In any presentation you make you should have enthusiasm, but also maintain a sense of calm. Be ready – and willing – to listen and let the potential investors speak. Recognize that while you have your own idea of what they need to know to best understand the project, they may not hear what you’re saying if you ignore their inquiries and concerns.

Realize that at every step a potential investor may be testing you. In some cases he/she may challenge you, not because they disagree with your vision, but because they simply want to see how you will respond to adversity.

If an investor does in fact discover a hole in your plans, be willing to listen: they might have a valuable idea to present. So while you have to stay true to the core of your idea, be willing to bend and be flexible.  In the word of Victor Hugo, Change your opinions, keep to your principles; change your leaves, keep intact your roots.

Because you’re business idea has a hole in it doesn’t mean the investor will lose interest. But if there were a hole in your project plans and you were unwilling to recognize it, or adjust to it, that could be your undoing.

Originally published in Examiner.com NY Startup (Click to “Follow” my start-up business articles), and Businesspipeline.com (for business info, services, and resources). 

Copyright 2005 – All rights reserved)

About Brie Austin

Co-author of I'd Do It Again, he is a columnist/reporter for a variety of magazines in the areas of music, lifestyle, nightlife, travel and business. He also writes business documents and creates copy for websites.