How to approach potential investors for business

Consider launching your own company. However, you lack sufficient funds to launch the business. And investors or institutions are now the sole place where entrepreneurs may turn to address such issues.

Financial considerations should be your priority if you wish to launch your own business. It takes money to start a business or merely to operate one. Also, personal capital is not very helpful when you wish to launch a long-term business. An investor’s main objective is to increase the return on their investment.

Who are the investors?

An investor is a person or organization that pledges to contribute funds for a company’s growth in the hopes of earning a profit. An investor typically has a few objectives when making investments in different sectors, such as increased dividends, the ease of bank loans, ownership, and variations in risks and returns.

Let’s have a look at some well-known resources that might assist you in searching for investors to fund your business.

1. Self-funding or bootstrapping

Anybody’s first thought when launching a startup is business money. which a person can use to launch their business. Obtaining funds for a business from friends, family, or personal savings is known as bootstrapping or self-financing. But bootstrapping won’t be your only option if you want to launch a big, long-term company.

Bootstrapping: Running a business without external investors. | Photo collected.

Recently, Ikramul Haque, Md. Imran Hossain, and Iftekhar Ahmed, three headgear (hat brand) entrepreneurs in Bangladesh, launched a hat business with just 12,000 taka. Today, they sell between 7,000 and 7,500 hats of their brand online each month in Bangladesh. These three business owners even have plans to expand their brand internationally.

2. Crowd Funding

Using the internet to raise money from a large number of individuals or to finance a project or campaign is known as crowdfunding. This platform has steadily gained popularity as a result of technological advancements. Through the crowdfunding platform, an entrepreneur presents all of his startup concepts or plans to a particular investor or group.

Any investor who shows interest in the business or content will provide the entrepreneur with enough capital to put it into action. The business owner can then launch a new venture if they have enough money. The website oporajoy.org is a crowdfinancing platform in Bangladesh.

A case in point is Facebook’s 2014 acquisition of Oculus, which was founded through crowdfunding and paid $2 billion.

3. Angel Investors

Angel investors are those who provide business owners with the money they need to launch and grow their companies. In addition to giving them money, they also give them the guidance they need, and as a result of their investment, they may even be able to purchase stock in the company.

Angel investors may choose to invest alone or in tandem. In essence, they wish to finance a range of young entrepreneurs’ startup concepts. They indicate interest in investing after carefully evaluating which of the initiatives put up to them is the most appropriate.

The biggest examples of how important the contribution of angel investors can be are Amazon.com, Starbucks, and Apple. Although these companies were very small in the beginning, their businesses were later expanded through angel investors. Also, Bangladesh Angels was inaugurated in Bangladesh in 2019. Entrepreneurs or investors can apply for the fund through this link: http://www.bdangels/

Angel Investors: Their role as investors for business. | Photo collected.

4. Venture Capital

Before granting loans, different banks in Bangladesh look at a number of parameters, which benefits well-established companies. However, an entrepreneur beginning from scratch cannot take into account all the considerations and still receive a loan. The best course of action in this situation is venture capital.

When a new business idea is risky, venture capital organizations are prepared to take chances. There are currently about 11 venture capital firms in Bangladesh that provide funding to business owners.

Candy Crush Saga Game, Snap.com, King Digital Entertainment, and WhatsApp are among the most well-known companies in the world that have used venture capital to fund their operations.

5. Company Incubator

A business incubator is a facility or organization that assists in the development of innovative and potential business concepts. Assuming it as a sort of beneficial medium, a new company receives many forms of assistance to help it grow throughout its early stages.

Business Incubator: Growth of new ventures with support from investors for business. | Photo collected.

Bangladesh also has a lot of business incubators, such as CUET’s Sheikh Kamal IT Business Incubator. This incubator supports nascent IT entrepreneurs. The business assistance platform “YY Goshthi” is currently doing very well in incubation in Bangladesh as well. Apart from funding, they also offer training, consultation, workspace, and other business development assistance like technical and marketing support.

6. Cash awarded in different contests

There are often contests to showcase innovative concepts. Such contests are an attempt to highlight exceptional and one-of-a-kind projects. An entrepreneur can greatly benefit from the “prize money” awarded for the top concepts in the competition. When beginning a business, prize money like this is essential as well.

In many nations around the world, these kinds of activities are widely organized. In 2017, for particulars, Myanmar’s biggest startup competition raised $37,500 for 11 startups. As a result, the groups’ visibility and breadth of work have greatly expanded.

7. Banks

It is important for an entrepreneur to know which bank offers loans for the industry in which his business operates. In Bangladesh, practically every bank offers a loan program for both new and established companies. Through three banks, the SME Foundation now offers loan assistance. Several noteworthy loan options include:

Banking Institution: Their role as investors for business. | Photo collected.

• IDLC Startup Loan: Repayable within 5 years, up to a maximum of 25 lakh taka.
• Karmasangsthan Bank: No collateral is required for loans up to 2 lakh taka.
• Mutual Trust Bank: A small business loan can be obtained for up to 50 lakh taka. Until the amount of 5 lakh taka, no collateral is needed.
• IFIC Pranto Nari (Women Entrepreneur Loan): It offers a unique loan intended for women entrepreneurs at the grassroots level.
• Equity and Entrepreneurship Fund: Bangladesh Bank: For the food processing, software, and agricultural sectors.
• IDLC Innovation Loan: 5 lakhs to 1 crore taka at most. Members of BASIS receive special perks.

8. Small-scale loan

Bangladesh offers financing for small and cottage enterprises through many globally renowned NGOs, including Grameen Bank, BRAC, ASHA, and others. In essence, they locate grassroots business owners for whom microfinance is more crucial.

9. Government support for startups

Through numerous initiatives or contests, the government searches for solutions to persistent issues at different points in time. Besides that, several events offer chances to finance companies. Startups can be effectively financed through such government project programs.

“References”