How to Find Investors for Your Business
Business investors differ from startup investors. They evaluate revenue, profitability, and operational stability. Revenue under $100K typically disqualifies you from most business investors.
Types of Business Investors
SBICs (Small Business Investment Companies): SBA-licensed firms providing $250K-$5M. Debt and equity financing. Require established revenue and growth potential. Don't fund early-stage ideas.
CDFIs (Community Development Financial Institutions): Flexible capital for businesses in underserved communities. Work with businesses traditional lenders reject. Focus on community impact.
Industry-specific investors: Focus on particular sectors (restaurants, healthcare, manufacturing). Understand sector dynamics. Provide strategic value beyond capital.
Private equity: For mature businesses with $5M+ revenue. Requires control. Operational involvement expected.
What Business Investors Evaluate
Revenue thresholds: Most require $100K-$1M+ annually. Below this, consider idea-stage funding or bootstrapping.
Profitability potential: Path to profitability required. Unprofitable without clear path = rejection.
Market opportunity: Growth potential in existing market. Competitive position matters.
Management team: Experience in industry. Track record of execution. Weak teams reduce investor confidence.
Where to Find Business Investors
SBA.gov lists licensed SBICs by location and industry focus. Government-backed resource for small business financing.
Local economic development organizations: Connect businesses to investors, grants, and loans. Resources vary by location.
Industry associations: Connect to sector-specific investors. Restaurant associations for restaurant investors. Healthcare associations for healthcare investors.
When Debt Makes More Sense Than Equity
Debt works when: Cash flow to service payments. Want to retain ownership. Predictable capital needs.
Equity works when: Growth capital needed. Accept ownership dilution. Strategic partners valuable.
Many businesses combine both. Debt for working capital. Equity for growth initiatives. Structure depends on your situation.
