It would be common for a growth equity investment to be “structured”, meaning that their investment would be in the form of a preferred class of stock possessing features not offered to other shareholders (e.g. For tips on how to use government resources to find investors, keep reading! Why Private Equity Likes Founder and Family Owned Businesses, How to Find an Investor for Your Business, What to Expect When You Sell Your Business,, /wp-content/uploads/2014/12/logo_blue_.png. Angels will come from various walks of life – in some cases they will have generated their wealth from entrepreneurial or other business pursuits, though they are likely to be passive investors. ClearLight is a private equity firm headquartered in Southern California that invests in established, profitable middle-market companies in a range of industry sectors. accruing dividends, liquidation preference, etc.). Ideally, your investors will provide not just money, but resources and expertise to help your project launch and succeed. Often these are housed in community colleges. Start by requesting a free trial – this may be enough to build your initial list or you may find value in becoming a subscriber. Successful private investors may hear hundreds of pitches every week. Accelerator programs are a great way to meet other founders, get real-world guidance from industry mentors, and smooth out some rough edges. Last Updated: August 11, 2020 Network, network, network. Private Equity: Another source of professional capital though for established, profitable businesses. They are often operating from a fund that has been set aside by an investment firm to source deals for the network. That said, you do have several avenues to meet investors… Ideally, your investors … How to get private investors to commit Be prepared. Seeking Out Lenders You Don’t Know—Yet. As with other professional investment firms, make sure their. Also make sure your start-up expenses are realistic. Sometimes seed funding will come in multiple rounds. Like banks, many VCs have professionals solely focused on deal origination, so those professionals may be a good starting point. So secure yourself within those networks, do your research on angel investors who work in your field, and try to get an introduction. Rather, search funds need to present investment opportunities to their backers who then can approve or deny an acquisition. Each of those 100 people will potentially tell their friends about your product or service. High net worth individuals who have both the personal liquidity and risk appetite to make non-control investments into early stage companies. Because growth equity deals traditionally have less upside potential than VC deals, a growth equity investor will be less tolerant of investment losses and may seek more downside protection than some of the earlier stage investors profiled above. If you fund your project through contributions from 100 people, those are 100 people who are interested in your idea and want to see it succeed. In other words, if a family office has made all of their money in real estate and seems to focus within that asset class, it may not be worth approaching them about your manufacturing business. They could be successful entrepreneurs themselves, or investment experts, or leading influencers in your field. Please help us continue to provide you with our trusted how-to guides and videos for free by whitelisting wikiHow on your ad blocker. Since inception, ClearLight has raised $900 million in capital across three funds from a single limited partner. With all the crowdfunding platforms available, some with targeted industries such as arts, science, business, startups, and others with angles like. This article has been viewed 6,780 times. The ClearLight team has extensive operating and financial experience and a history of successfully partnering with owners and management teams to drive growth and create value. This is because the more sophisticated investors in each category will have invested in developing a digital presence such that they are easy to find. Use posts not only to talk about your idea but also demonstrate the need for the product or service you want to offer. They say a picture is worth a thousand words, so I figured the flow chart below would be a more efficient way to help you determine the type of investor that is appropriate for your business. To find investors, create social media pages for your business, and encourage friends and family to share them on their networks. To improve your odds, look for family offices that advertise investment activity of the variety that your business presents. Include news and information about the neighborhood where you want your business to be located.