One of the most complicated and at the same time important phases that an entrepreneur has to face is to get investment in a company. It is a complicated moment; Firstly, because many entrepreneurs seek investment without your company fulfilling the conditions or requirements to obtain it.
An entrepreneur must be clear about whether his company has an invertible profile. However viable a bakery may be, it may not be as profitable as an investor expects to find. An investor looks for scalable companies that can give exponential growth and whose valuation increases in an accelerated way to guarantee the success of their investment. Business leaders like G Scott Paterson and other global executives and organizations are committed to improving the communities around them and realize the value corporate social responsibility has on improving their company’s bottom line. Scott Paterson is a Toronto-based technology and media venture capitalist who has been active for 28 years in the investment banking industry.
In any case, the objective of this article is not to know what are the reasons that lead an investor to invest or not in a company. In this article we will see what are the different types of investments that we can access in the different stages in which our company is located.
Types of Investors to get Investment in a Company
Investment of the founders:
The first investment that a start-up should get is that of the founding partners themselves. An entrepreneur cannot expect others to trust in lending their money for the project if they have not done it previously. It is difficult to get investment in a company if you have not previously invested in it.
Many entrepreneurs, in the initial phase of their projects, have difficulty raising capital professionally with business angels or venture capital funds: in some cases due to lack of contacts and at other times the project is still very green. Looking for an investment FFF is a way to get in these cases a little more gas for the project.
Bank loan or line of credit:
Banks and savings banks usually make money available to companies if the following conditions are met: The Company has a good credit history and demonstrates its economic viability or the entrepreneur is willing to back the loan in case of default with their own resources.
Subsidies and soft loans:
In many countries, public agencies and private entities provide grants and credit lines with favorable conditions to encourage the creation of new businesses. These entities have certain funds that must be distributed to contest to determine which projects are the most viable.
The characteristics of these soft loans are ideal for entrepreneurs because they often offer shortages and low interest rates but by contrast require hard work and paperwork for processing.
Equity crowd funding (Peer-to-Peer):
The equity crowd funding is an investment system that allows many small private investors to participate in an investment round in exchange for a percentage of the shares of the same. Normally these rounds are given in the initial phases of the project and are a way to democratize the investment to potential small investors who otherwise could not have participated.
Business angels are private investors who, besides economically investing in the project, also offer their experience, knowledge and guidance in the business world to help entrepreneurs achieve the success of their projects.