How to get investors interested in your business

Finding funding plays an important role in business growth and expansion.

Securing an external investor can help you achieve that growth, but you need to ensure your business is attractive to those with money to invest in scalable products and services.

This guide outlines some of the key steps you can consider taking to attract potential investors to your business.

Read our guide on 7 ways to prove values to investors.

Ways to attract investors

Research relevant investors

The key to attracting investors is targeting those likely to be interested in the product and service you provide.

It’s a good idea to research potential investors in order to understand their background and which businesses they’ve previously invested in to ensure they are a good match.

Knowing the criteria they use when making investment decisions can also be a good idea.

Investors have various reasons for why they provide funding and varying expectations for their involvement in a business.

The type of investor will often dictate whether they suit your business.

For example, angel investors typically back early-stage local businesses, whereas venture capitalists look for firms with a track record of success and potential for rapid growth.

Network and build relationships

Investors can be hard to track down but finding them and building relationships is important.

Angel networks, the UK Business Angels Association (UKBAA), and the British Private Equity & Venture Capital Association run events that unite founders and investors.

Many investors only back businesses they have discovered via personal referrals, so build connections with people who can do that for you.

Ask other entrepreneurs and advisers, such as accountants and lawyers, if they can make introductions, and check if your contacts on networking sites such as LinkedIn have valuable connections.

Keep your emails to investors concise and avoid sending the same standard message to each investor.

It can be a good idea to make any emails bespoke and show that you’ve done your homework.

Develop a solid business plan

A strong business plan is often a crucial requirement for getting investment as it will help an investor to decide whether to fund a business.

The plan could include the following sections:

• business and objectives – A brief description of your business and its products or services and an overview of your short, mid, and long-term goals
• skills and experience – Your skills, experience, and those of any co-founder/s, management team, and advisers you may have
• customers, market, and competition – An understanding of your customers, how you fit into the market, your competitors, and how you differentiate your business
• sales and marketing – How you attract customers, such as your sales channels, pricing strategy, and marketing tactics like social media, exhibiting at conferences, and online advertising
• operations – Operational issues including the staff you currently have/will need in the future, equipment or tools you require, regulations related to your business, and what you will do if things don’t go to plan
• financials – The revenue you are making and expect to make in the future.

It’s a good idea to include a detailed cash flow forecast that estimates the money you expect to bring in and pay out over time.

Read our guide on reviewing your business plan.

Create a persuasive pitch deck

If an investor invites you to pitch, a pitch deck is key to winning investment.

The deck is essentially a shortened version of your business plan as a slide presentation that concisely communicates information such as:

• your product
• your team
• your business model
• key financial data.

The deck needs to be clear and compelling to excite and engage the investor about your business.

Read a checklist for what to include in your pitch deck here.

Build a strong management team

Investors may expect to see a passionate and determined management team with the skills and experience to make the business a success.

If your team lacks some of the necessary skills and experience, it might be worth addressing before pitching to investors.

This might require recruiting new people as paid employees or finding external advisers and mentors with a relevant background.

Showcase a unique value proposition

You need to convey to an investor what makes your product or service stand out and demonstrate the problem you are solving or the need you are meeting.

It might not be entirely new, but investors will want to know how your product or service is better than those of your competitors.

Demonstrate market potential

Investors need to know that there is a big enough market for your offering and that your business has strong potential.

To demonstrate this you have many market research options, including:

• Office of National Statistics data
• reports and databases via British Library Business & IP Centres
• carrying out surveys using tools like SurveyMonkey and Typeform
• using the services of market research companies.

Develop financial projections and a clear path to profitability

Investors will want to know how your business will make money, and how and when they will make a return on their investment.

They have to understand your growth potential and how you will reach profitability and beyond.

You’ll need a cash flow forecast, a profit and loss statement, and a balance sheet.

It’s not just about numbers on a spreadsheet; investors also need to understand the assumptions behind your projections.