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How To Spot The Right Investor For Your Business

Spotting the right investor who will lend support to your business can be tricky.  Find out how you can objectively select the right financier.

Below are some signals that could lead you to “the one”.

Reference checks turn out good

When you have a potential investor knocking at your door, it is important that you perform reference checks before allowing them a deeper insight into your business. This isn’t for security reasons alone.  When you do reference checking, you get to know what they value and how they were as business partners in the past.

You are in sync with them

Have you noticed that there are people whom you are comfortable dealing with right away?  Sometimes there will be instances when you have to rely on your gut feeling.  While this may appear impractical in terms of choosing a financier, sometimes you have to use part of your instincts when making a final decision.  Business decisions are usually based on stats, figures, past performance, and a whole lot of quantifiable bases, however, be aware that there are business owners who have used their gut feel have been correct in their decision.

They value communication

Some people fail to respond appropriately and in a timely manner.  If a potential investor fails in this aspect, it is a strong sign that they are not that into your business.  On the other hand, if they seem to reply in a professional manner and without much delay, chances are, they are interested to talk to you and further your discussion regarding the business.  This attribute helps a lot when an investor has already partnered with you.  It will be easier for both of you to come up with business decisions in a timely manner.

They research about your business

A good investor will extensively research on a business he will pour his money into.  They won’t rely entirely on info coming from you.  They want to hear what others are saying about your business to weed out any biases.   If your business sells a product, it is only logical that they will want to try it for themselves.  They want to find out if the product or service is a good one, is marketable, has demand, and will attract a lot of clients.  After all, customers are the primary source of a business’ revenue.

They ask a lot

Have you spent time with a potential investor who doesn’t seem curious enough about your business?  These people just sit there and listen to your briefing and don’t seem to have any questions.  They lack the natural curiosity typical of an investor who wants to protect his interests too.  Asking relevant questions about the business is a good sign he does care and will care for it too.

Deciding on which investor to choose for your business is a serious matter.  Know if they are the right fit for you by remembering these tips and implementing them.

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