What Investors and Investment for Businesses are out there?

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Types of Investors and Investment for Businesses



Learning about the different types of investors out there is important to any business trying to secure funding. This is important for business growth and stability. Here are the most common types of investors. You should consider the type and size of your business when approaches these people, and find investors that specialise in your industry.

Angel investors

Angel investors invest in early-stage or start-up companies in exchange for a 20 to 25 percent return on their investment. They have helped to start up many prominent companies, including Google and Costco. Richard Butler Creagh, founder of Henley Finance said, "You are likely to get an investor who has strategic experience, so they can provide tactical benefit to the company they are investing in.

Venture capitalists

Venture capital is money that is given to help build new start-ups that are considered to have both high-growth and high-risk potential. Fast-growth companies with an exit strategy already in place can gain up to tens of millions of dollars that can be used to invest, network and grow their company frequently.Venture Capitalists can generally offer advice to entrepreneurs on whether the product will be successful or what they need to do to bring it to market. However, venture capitalists have a short leash when it comes to company loyalty and often look to recover their investment within a three- to five-year time window, he said.

Factoring/invoice advances

this process, a service provider will front you the money on invoices that have been billed out, which you then pay back once the customer has settled the bill. This way, the business can grow by providing the funds necessary to keep it going while waiting for customers to pay for outstanding invoices.

Crowdfunding

Crowdfunding on sites such as Kickstarter and Indiegogo can give a boost to financing a small business. These sites allow businesses to pool small investments from a number of investors instead of having to look for a single investment.Make sure to read the fine print of different crowdfunding sites before making your choice, as some sites have payment-processing fees, or require businesses to raise their full stated goal in order to keep any of the money raised.

Grants

Businesses focused on science or research may be able to get grants from the government. The SBA offers grants through the Small Business Innovation Research (SBIR) and Small Business Technology Transfer (STTR) programs. Recipients of these grants are required to meet federal research-and-development goals, and have a high potential for commercialisation.

Find out more about getting the right finance for you on the Henley Finance website. Learn more about founder Richard Butler Creagh here.

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