How to Find Investors for Your Ontario Startup
Imagine you have the perfect solution to a problem that you and others face. You know how to fix the issue, but you don’t have the money to get started. If this sounds like you, consider finding investors.
The importance of finding investors applies to new and existing businesses because it can keep your business alive. Fortunately, you have multiple options when it comes to finding public or private investors.
Read on to learn more.
Ask Your Relatives
One of the easiest ways to find private investors is to start with people you know.
You can talk about your startup and what your business does. Let your friends and family ask questions so that they can feel comfortable when investing in your business.
If they do decide to invest, make sure you create an agreement or contract stating the terms of the investment. That way, you can keep the relationship professional so that it doesn’t affect the rest of your life.
Your family and friends want you to succeed, so they may be more willing to invest than strangers.
Use Your Network
Another great place to find investors is to ask your professional network. The people in this group may not know much about your personal life, but perhaps you’ve worked with them or met them at a professional conference.
You can connect with these contacts and pitch your business idea to them. If you don’t have a big professional network, you can put yourself out there and go to networking events to meet people.
Then, you can talk about your startup and tell people about yourself. Someone may want to invest in your business.
If you don’t have a network, it can be hard to find investors this way. However, you should still build your network in case you need more money later.
Create a Crowdfunding Campaign
Crowdfunding can be an excellent option for finding smaller investors as you start your business. You can offer rewards to people who spend a certain amount of money on your campaign.
If you can’t meet with people in person, you can use your crowdfunding page to pitch your company, product, or service. People can learn more about the startup, and they can decide if they want to invest.
Once you reach your goal, you can send out any rewards that people earned. Then, you can use the money to start and grow your company.
Crowdfunding can be a great way to find investors online. You don’t have to worry about asking each investor for a lot of money because it can all add up.
Find an Angel Investor
If you have a solid idea for your business, you can work with angel investors.
These investors usually have a high net worth, and they can be an excellent alternative to loans and other funding options. Now, you will have to give the investor equity in your company in exchange for their investment.
However, they may also help you with business tasks, such as finding manufacturers or dealing with distribution. You can also work with multiple angel investors to get more money and help.
Now, if you don’t want to give up equity in your company, this can be hard to do. But it can be a great option if you want some extra assistance.
Join a Pitch Competition
You can also find investors online through a pitch competition. When you want to join one, you can search for Canada pitch competitions on Google to see what competitions are open now or soon.
The requirements may vary depending on the competition. For example, you may also need to be a student to participate in a university pitch competition.
The prizes can also vary between competitions. However, it can be a great way to get experience, and you can meet new people and grow your network.
Even if you don’t win the competition, you may be able to ask the people you meet for an investment if they liked your idea.
Get a Bank Loan
Another option for finding an investment is to get a loan. While a loan isn’t a traditional investment, it can help you get the funds you need to start or grow your new business.
If you have good credit, getting a bank loan with a low interest rate can be a good option. You don’t have to give up ownership over your startup, and you don’t have to worry about ruining your relationships with family or friends.
But you do have to consider the interest you’ll have to pay. Even with a low interest rate, the costs can add up, and it could affect your business expansion.
Use the Canada Small Business Financing Program
You can also apply for the Canada Small Business Financing Program. The program can help with costs such as registration fees, equipment purchases, and land purchases.
You can also use the funds to improve existing land or equipment. However, you can’t use the money for inventory, working capital, or goodwill.
Still, it can be a good option if you need some help and can’t get money elsewhere. You can get up to $1 million in funding, and you can apply for the loan at a bank or credit union.
When starting or growing a business you may need additional capital and you may want to know how to find investors. Whether you work with relatives or find angel investors, there are a number of options for you to look into.