| As mentioned before in my previous articles, there | | | | republics of the Soviet Union and Eastern Europe and |
| are all kinds of different investors around for the | | | | Aunt Valya Private Equity might invest only within |
| entrepreneur to choose from. We have already | | | | continental Europe. When seeking an investor, you |
| covered the types of investors there are, which can | | | | should find out where their geographic preference is. |
| be business lenders, angel investors, institutional | | | | Sometimes this is shown on their websites, and |
| investors, or venture capitalists. This is just a broad | | | | sometimes not. A good way to figure out what |
| range of investors that you might see. Once you | | | | geographic location an investor prefers is by looking |
| have your business plan and your executive summary | | | | at its portfolio companies and the countries where |
| ready, you are now ready to seek the right investor | | | | they are located. |
| to ask for capital. | | | | Industry Preference |
| There are several factors that you need to take into | | | | Industry preference is just as important as the both |
| consideration before actually contacting your | | | | above mentioned preferences. Usually investors |
| prospective investor. There are many things you | | | | invest in the industries that their partners or portfolio |
| need to look into, such as stage, industry, and | | | | companies have expertise in. When looking for an |
| geographic preference. Furthermore, you should also | | | | investor, you need to look at the industry that you |
| look at their portfolio companies, who they are and | | | | are in and you want to have an investor who has |
| what they do. You will see all of this below. | | | | the expertise in the same industry that you are in. |
| Stage Preference | | | | You could have an excellent product, but if you are in |
| Basically, stage refers to the stage that your | | | | the IT industry and you contact a VC firm that |
| company is in. If you are pre-prototype, or your | | | | makes its investments in the pharmaceuticals |
| prototype has just been developed, you are either | | | | industry, your executive summary will not be looked |
| seed stage or early stage. These stages are usually | | | | at. |
| the highest risk stages for investors, but their ROI, | | | | Determining an investor's industry preference can be |
| or return on investment could be very high. On the | | | | done by first looking at their portfolio companies, and |
| other hand if your company is at a later stage and | | | | sometimes, the industry preferences are shown on |
| already has a regular flow of clients, the risk is | | | | investors' website. If you look at an investor's |
| generally lower to the investor. If your company is | | | | portfolio, and see what the industries that the |
| either seed or early stage, you will need an investor | | | | portfolio companies are involved in, you can get a |
| who is more than likely a venture capitalist and | | | | glimpse of what industry preference a given investor |
| specializes in high risk investments. On the other | | | | might have. It's important that you find an investor |
| hand, if you are a company that is already | | | | who's preferences meet your company profile. |
| established and needs bridge funding or expansion | | | | Investor Activity |
| funding, you need an investment firm or a private | | | | Another important factor you need to look at when |
| equity firm that specializes in the later stages of a | | | | choosing an investor is whether the investor is |
| company's life. This means that you will need an | | | | actively investing or not. You can usually do this by |
| investor, who's stage preference is either later stage, | | | | looking for any press releases that most investors |
| growth or expansion stage, or mezzanine stage. | | | | usually have on their websites under links with the |
| These are usually stages of companies who are | | | | title "SoSo Investments in the News," etc. This is an |
| ready for a liquidation event, where the investors | | | | archive of all the active that particular vc firm has |
| exit and make their profits. This means that these | | | | done and has been covered in the press. The key |
| companies can be either involved in a leveraged | | | | here is that if there is no fresh press release issued |
| buyout or LBO, or a managed buyout or MBO. | | | | from that vc firm within a year, that means that that |
| Mezzanine stage is when a company is ready for | | | | particular investor might not be actively investing at |
| mezzanine capital. This is the capital a company needs | | | | this time. You need to know whether the investor is |
| as it prepares for an IPO or initial public offering. This | | | | active. If the investor is not active, there is no sense |
| is also a liquidation event. | | | | in sending your company information to him. |
| Geographic Preference | | | | How to Get the Latest Scoop on Investors |
| Geographic preference is equally as important as an | | | | Trying to find the latest information about investors |
| investor's stage preference. Your company may fit | | | | can be very difficult if you are doing it on your own. |
| an investor's stage preference, but you may not be | | | | There are many helpful resources online that can help |
| in the right geographic location that a particular | | | | you to get the latest information on over 4300 |
| investor might invest in. There are different investors | | | | investors worldwide. I have used this system and I |
| throughout the world and the smaller firms might just | | | | must say, I can't push it enough. A venture capital is |
| invest in a particular geographic location, whereas | | | | a resource that I have trusted when searching for |
| some of the larger global investment firms will invest | | | | investors to fund my ventures. The database not |
| internationally. Other investors may invest in an entire | | | | only covers each individual investors, but also gives |
| continental area, for example Uncle Vasya Ventures | | | | you their stage, industry, and geographic preferences. |
| may invest in Eurasia, which would encompass Russia, | | | | You can also easily contact these investors through |
| Central Asia, the countries that make up the former | | | | the database. |