What to Offer Investors?

by fatpeterpan. Posted on Sep 17, 2020    1    5


I am at a stage with my business where I am putting together a list of invitees to attend an investment meeting and I am wondering what are some common strategies for making an offer? I am not look for much money, relatively, and not looking to invite many people either. I was thinking of giving 3 options, something like a medium interest small loan (5-10k over 2 years), a higher interest, larger loan (10-50k) or a TBD percentage of the company for 50k+. Money is something I have never been good at and I'm worried of giving too much away just due to me feeling bad for asking for money from anyone in the first place.

Incase you're wondering, a bank loan is not off the table as a possibility for funding, right now I'm researching as many options as I can think of and trying to learn.

Thanks,


Comments

Fabulous_Doctor8088 1

Investors don’t do loans, they purchase equity in the company (exact terms are flexible).

If you’re looking for a “startup loan” first, I recommend going via a path where you don’t have to pay back the loan with money and instead offer prizes/products ; crowdfunding sites.
Doing this will let you gauge your interested / prospective clients. Some investors may even come out of this. Best of all, everyone, you included will see how serious you and your product/company are about success.

Second, I recommend going to the banks, or Small biz program for a loan. For the same reason that you will be able to see how plausible your expectations are. These also offer really low interests rates if your credit is good. Keep in mind a lot of these do require you to have some business history, paperwork and reports in line so that they can gauge their risk.

If you go to people that you know for loans, it will most likely end in disagreements, fallouts or bad contracts. There is so many things that can go wrong that when logic is applied, they will go wrong.

If you’re solely looking for investors, I advise you to add on to your team. No investor that I know of will blindly agree to give money to someone who is “not good at money stuff”. You need to build a team where someone will run the financials while you run the rest of the business. Yes, this person will work for free basically for the first 6-12 months while you get a reasonable business plan set up that you can present to investors. Investors don’t want their money plus interest, they want your profit.

All in all, I hope I helped. Many businesses fail and cause more financial damage than good. I wish you best of luck and remember, it is better to crawl than to quit.

jake42385 1

How long has your company been active? Any profit? If not, how much in losses?

  fatpeterpan 1

Started in June 2020. No profit. Have approx 60k of equipment/assets. Right now the main focus is securing a patent but that process is well underway and now am looking for $$$s

jake42385 2

If you are thinking of selling some equity, make sure the buyer is offering something to the business more than just investment. Money is cheap, equity is not. Be confident in your idea and your business. Talk up the patent and why it adds value. Talk up your revenue and profit projections without over selling. Don’t take a loan if you don’t think you can pay it back.

kwikidevil 2

I'm not going to pretend that I have much advise but instead of loans, why not offer a share of your buisness and get some partners?

They could offer the capital and on the long term, their expertise.