The Best Types of Investors for a New Business

One of the more popular ways in which people raise money for their new businesses today is with crowdfunding websites like Kickstarter and Fund Anything. These sites let you create a small business plan that shows why you need income, the amount you need to raise and other important information. You can even include items that you’ll give away to those who make a donation to your company. Though the website itself will typically take a cut of the funds you raise, you may raise enough to get your business off the ground.

Angel investors are professionals who have money and want to help start up businesses succeed. Sometimes called angel networks, many of these investors work together and put in an equal amount of money. When you work with angel investors, the investors will give you the funds that you need in exchange for a portion of your company. If you work with a network, the percentage of your company that you hand over is equally divided among each investor in that network.

Micro loans are a relatively new investment opportunity that are similar to crowdfunding websites. A micro loan website lets you accept a small loan from another individual with the agreement that you will pay the person back. Some sites also require that you pay interest on that loan, but the interest rates charged on a micro loan are generally less than a bank would charge. The problem with micro loans is that you can usually only borrow a small amount. While you may not get enough cash to launch your business, you can get enough to pay some of the smaller bills your company accumulates.

Borrowing from family and friends can help you launch your business. Major business men and women borrowed money from their loved ones during their early days. When you look over a steve wynn profile, you may even find that Wynn borrowed $30,000 from his loved ones to buy his first casino. Create a simple contract that shows the equity you give to your loved ones for their loan or a contract that shows how much you will back each person you borrowed from and when you will make payments on those loans.

You can also reach out to professional investors as a way to raise capital. The television show Shark Tank features several major investors who listen to pitches from individuals with businesses or products. While you may not land on television, you can still pitch your concept, idea, business or product to investors online and in your own city. Investors will usually accept a certain percentage in your company in exchange for a set amount of money, but other investors will loan you money to get your company up and running. With angel investors, crowdfunding and other sources, you can raise all the capital your new business needs