WHERE TO FIND INVESTORS
A few weeks ago, I looked at the steps a business can take towards making themselves ready for investment – identifying what investors want and ensuring the company meets those needs. Once you’ve done that, of course, entrepreneurs face a potentially more daunting challenge: finding those with the money and willingness to invest in businesses.
It’s fair to say that those characters are rarer today than five years ago, even though the right proposition tends to bring them out of the woodwork. Potential investors are a lot more cautious than they were a few years ago: they need to have faith in both the business proposal and the management team driving it.
For this reason, most entrepreneurs find their greatest success when tapping their existing professional networks for potential investment. The people who’ve seen what you can do first-hand, or have contact with those who have, will be far likelier to back you if they buy into your idea. In other words, your first step should be to go through your stack of old business cards, looking to line up informal meetings or coffees that might lead on to something more. While this is a very time-intensive way of doing things, it’s also a route with a high degree of success, as many serious investors are cautious animals by nature they prefer dealing through their own personal networks, or referrals from people they seriously trust. Those informal meetings, even if they don’t lead to investment, can also give you valuable insight into your own business.
Beyond this, it shouldn’t be forgotten that the state itself is also a serious investor in Irish business through Enterprise Ireland and local Enterprise Boards. Obviously, this investment is geared towards employment generation and, in the case of Enterprise Ireland, high-potential companies with an opportunity to export abroad. It also comes with set requirements and goals – an entrepreneur effectively has to tailor their investment proposition to the opportunity rather than his or her business. However, if you’re looking for finance to help with either research and development, or market research, there are attractive supports available. We’ve written in more depth on this area here.
If neither of these are an option, you can seek help from angel investor networks. Of course, certain caveats apply: some of these organisations are for-profit, and will come with entry fees, while you’re more likely to run into tyre-kickers or worse when you don’t have the added security of a trusted network. This applies to people you can approach through online business forums too, though these represent another useful way of coming into contact with people: just always approach with due caution. One particularly useful angel investor network is the Halo Business Angel Network. Run in partnership with the Dublin Business Innovation Centre and other non-profits, it seeks to match up businesses to potential investors with due regard to both sides.
At DCA Accountants and Business Advisors, we work with many companies at various stages of the process of seeking investment. We’re always keen to offer advice and support, so do feel free to get in touch and set up an initial, no-obligation consultation meeting.
Declan Dolan,
Partner,
DCA Accountants and Business Advisors.
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