How to find investors for a small business

There are 30.2 million small businesses in the United States. Standing out among the masses can be a challenge at best. In order to set yourself up for success for the long-term, here are 5 areas where you can invest in your small business to get ahead of the competition:

Build Your Brand

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Building a strong brand is a smart way to invest in your small business. If you want to grow your business online, you need to grow your brand first. Your brand is more than a nice logo, it’s the identity of your business. You want a brand that elicits emotion and is easy for your audience to connect with. Although your brand is more than a logo, having a professionally designed logo is one of the first steps toward great branding. Work with a designer who understands your company’s vision and can translate that into a visual masterpiece. Investing in other types of business like buying a fractional share in the stock market with will help you grow business.

Good branding can also motivate your employees. It can help them understand the vision and mission of the company and gives them something to take pride in. It can give your employees a purpose.

Tackle Technology

Adding new technology to your business’s repertoire is one way to invest in your small business and get a quick and measurable return. The options are endless, from upgrading your office communication to something like Slack, using free data programs such as Google Analytics , or using an integrated CRM platform such as Salesforce .

Shore Up Security

Security is one area that will always benefit from an investment of time or money. Investing in employee training is a surefire way to bolster your security plan. Avoid a costly breach by ensuring your staff are up to date on your business’s security protocols and know what to do to avoid being an easy target for hackers. An investment in an MSSP, or Managed Security Service Provider, is also a wise use of your resources. They will essentially take care of your business security plan , exposing your vulnerabilities and hardening your defenses.

Pour into Your People

Hiring employees can be expensive, so keeping the employees you currently have is important. Retaining talent and experience is a way to invest in your small business that will pay off in the near and distant future. Do some of these things to make sure your employees hang around. This b2b customer loyalty program is a perfect investment for both small and big enterprises.

Starting a new business is an exciting time, yet too often new business ventures are unable to succeed because of a lack of capital in the first two years of operations. Rarely does a new business owner have the personal assets or funding sources to start, grow, and maintain operations when starting up a new company. It may be critical for you to find investors for the capital necessary to keep the business operating the first few years. Unfortunately, few people know how to get those investors. These tips can help you not only locate investors for your startup but will explain methods on how to encourage those who are interested to invest money in your startup.

Develop a Business Plan

The first step in getting investors for your startup is to create a good business plan. A business plan should clearly explain what your business does, who your target market is, projected sales for at least the next five years and any industry reports that may indicate how your idea may meet an unfulfilled need. There are many online templates available that make it easy for you to create a business plan but keep in mind that it needs to appear professional. It should (of course) not be handwritten, but typed and put together in a folder or binder when you present it to a potential investor. You should also know the plan thoroughly and be able to answer any questions the investor may ask when you present the plan to them.

Start with Friends and Family

The best place to start presenting your business plan is to your friends and family. However, it is important that when you present your plan, you treat your friends and family as you would a business professional. Dress in business attire and present the plan as you would to a business person you do not know. Answer any questions they may have and keep the conversation focused on the business plan, not on the big game, your cousin’s latest job, or any other personal matters that might come up. Many times, friends and family are reluctant to mix money and personal relationships, but by discussing the matter with them with a business-like attitude, they may be more willing to keep an open mind. Be sure that your friends and family will receive the same benefits as an outside investor, such as stock options or repayment of their investment with interest.

Consider Working with an Expert

If you have never successfully started a company, you may need to add someone to your startup team that has experience in order to attract investors. Most investors want to put their money into companies that they know have a chance of giving them a big return on that investment. Therefore, if you can afford to hire a consultant who has had success with startup companies, you may have a better chance at convincing an investor that you will succeed. Understand that an investor is not happy until they begin to see money coming back to them, so anything you can do to better position yourself to succeed is beneficial.

Demonstrate Why Your Startup is Different

Investors want to know why your startup is different than that of your competitors. If what you plan to produce is a trade secret or a patent, you will have much more success finding investors as this would indicate a new invention or innovative idea. However, for many startup companies, they are not necessarily developing a new invention, but are creating a business that is similar to others. In those cases, it is critical to explain to an investor why the product or service you offer is better, different, or meeting an unfulfilled need in your community. By demonstrating to an investor that your business plan is unique from the competition, you will have a better chance of convincing them that your company is worth their investment.

Every successful company began with someone’s idea and the majority of those companies succeeded because they were able to present a business plan to investors that convinced them that the project or idea would meet a need that was not currently being met. By keeping a professional attitude and developing a business plan that completely and competently describes your company, you will be able to begin taking the steps to making your dream become a reality.

How to find investors for a small business

As your business grows, you need more capital. But, it can be a hassle for small business owners to get funding from large financial institutions. For some small business owners, working with private investors might be a smart move. You need to know how to find private investors for your small business.

Why small businesses are looking for private investors

Securing small business funds from large banks is usually difficult. Even if you walk into the bank with a detailed plan, you are likely to leave empty-handed because small businesses pose a risk to the bank.

Small businesses make less revenue than large corporations and are more likely to default on a loan. The Biz2Credit Small Business Lending Index reported that only 24.1% of small business funding requests were approved by big banks in February 2017.

If you are denied a loan from the bank, don’t worry. There are alternative small business funding options, including private investors. Private financing comes from non-bank individuals (e.g., an angel investor) and firms.

Benefits of using a private investor

Private investors offer several benefits over other small business funding strategies. Often, private lenders specialize in a particular area of business. Beyond funding, they can give you their expertise and guidance.

Private investors are known to take on riskier ventures. They understand the opportunities and hazards of investing in your small business. Having a passion for the industry motivates the right investor to help grow your small business.

Types of private investors for small business

There are many types of private investors to consider. Carefully review your options before choosing a small business investor. Each investor has different strengths, terms, and advantages. The following are some common types of private investors and investment options.

Private equity

Private equity is money invested by private individuals and firms. In return for the funds, private equity investors receive owner’s equity in a business. The goal of a private equity investor is to sell their stake in the business after a few years of investing to make a profit.

Venture capital

Venture capital is available to high-growth startups. Usually, venture capitalists face a higher risk in their investments. But, the investment often has the potential to make a high return. Venture capital is a longer investment than a traditional bank loan. Investors in venture capital actively monitor the business. They are involved in board decisions, marketing strategies, and the business structure.

Angel investing

Angel investing is another private startup financing option. Angel investors are usually high net worth individuals who want large returns on their investments. Angel investors are like venture capitalists, except they invest smaller amounts. Angel investors take part in your business decisions and operations.

How to find investors for a small business

Federal government programs

Federal government programs offer venture capital programs for small businesses. For example, the Small Business Investment Company (SBIC) Program is offered through the SBA. This program involves privately owned investment funds that are regulated by the SBA. SBIC investors use their own capital plus funds borrowed with an SBA guarantee. The SBA does not directly invest in your business.

Crowdfunding websites

Crowdfunding websites give you access to a wide variety of small business investors. This investment strategy uses collective efforts to fund a business. Each crowdfunding site is different. Find one that matches your business goals and strategies.

Friends and family

Friends and family can be an option for a private investment. Though you know the investors personally, be professional when it comes to money. Make sure your friends and family understand the risks involved before they invest. And, keep them in the loop with business ideas, plans, and forecasts.

Private investor loans

Private investor loans are lending options offered by non-bank entities. Usually, the lender grants the loan because they believe your business has the potential to grow. The individuals and firms listed above sometimes provide private investor loans, including friends and family, venture capitalists, and angel investors. With a loan, you have to pay the money back plus interest.

How to find private investors

The key to finding a good private investor is careful preparation. Make sure you are ready to take on extra small business capital before approaching investors. The investors want to see that you have an organized plan, the potential for growth, and healthy finances.

Create a business plan that maps out what you will do with the money. Include realistic sales projections and detailed strategies that reflect long-term growth. Conduct a market analysis to improve offerings and connect with customers.

Decide how much money you need and compile the plan into a presentation. Know the strategy inside and out so you can easily talk with investors. Practice your pitch so you can convince investors to help finance your business.

After you have a fine-tuned business plan, look for private investors. Start small, working through your professional and personal networks. Try your chamber of commerce, small business community groups, and local trade associations.

You can also seek private investors through business capital brokers. Brokers evaluate your business plan, form relationships with investors, and match you to the best fits. Be cautious of the broker’s commission fees, as they can be costly.

How to find investors for a small business

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Need to find investors to launch a startup or scale your business? There’s more than one way to approach fundraising and to get noticed by those with the capital you need to get to the next level.

No matter how great your product or business idea, how lean you can operate, and how big you’ve grown already, more capital and financial leverage will almost inevitably be a necessity. Even the best funded and hyper-successful billion dollar startups have been engaging in more fundraising rounds than ever before.

As I describe in my book, The Art of Startup Fundraising, having enough working capital and runway to get to your next milestone is vital for giving your business the chance to live to its full potential.

Of course, the chances of receiving a random call from some super-sized venture capital firm or the producers of Shark Tank are pretty small. Especially, if you haven’t already attracted some well connected investors. Thankfully, for today’s entrepreneurs, I’ve seen an increasing number of ways startups are getting noticed, found and are connecting with potential investors.

If you haven’t landed the money you want for your next series yet, consider these options and then share a great pitch deck with interested parties to convince them of the potential of your business. If you need guidance, the pitch deck template by Silicon Valley legend Peter Thiel is a great example of simple story telling in slides to help you get funded ( see it here).

1) Online Fundraising Platforms

The past five years have given birth to virtually countless online fundraising platforms. They have become highly popular with sophisticated and accredited individual investors, angels, and even banks and funds looking for new ways to deploy capital.

The major platforms run from peer-to-peer lending sites which offer business loans to donation based, debt and equity crowdfunding portals.

For donations you can try Kickstarter or Indiegogo. For equity crowdfunding platforms the most popular platforms are the following:

Even if you don’t use online platforms to raise all the money you want, they can be powerful for getting noticed. The key is finding the right match in a platform for your venture and needs, as well as being realistic about what it will take to make a campaign work.

Success in business and fundraising is all about visibility, getting noticed by the right investors, who you know, and who knows you. Attending events is a great way to achieve this. Try to find out who is attending the event ahead of time and schedule meetings to be productive.

This can be pitch nights for presenting your own opportunity and meeting active investors who are there, engaging in coding marathons, or simply getting out to organized networking functions and industry trade shows.

If you are operating an early stage company, you may want to consider attending any of the following events:

To get ahead of the competition and take a more passive route, consider attending other events where your investors are likely to be. Think sporting events, charity fundraisers, film festival and yacht shows.

3) Social Media

Social media can be your best friend as a lean startup or solo entrepreneur looking to test the market, gain traction, and attract investors. It makes it easy to be discovered, and is still one of the most cost effective methods of reaching others.

You can take an inbound approach with your own posts and updates, or take a more active approach with collaborations and leveraging sponsored posts or influencers.

Direct messaging can be powerful too. If you can get the social profile handles of well fitting investors, it might only take one great message to connect with the capital your startup needs. If this sounds like a fit for you, check out this Forbes article with the LinkedIn contact information for the top 50 angel investors based on investment volume.

In the event you need VCs you can always go to Crunchbase and research for those investors that are actively investing in your industry. I recently covered some of the most active funds in this piece on Forbes.

When it comes to social media, here are the most popular channels and how to use them:

•LinkedIn for cold messages or to seek quality introductions to pass the social proof with guarded investors such as Venture Capital investors. In my opinion, LinkedIn Premium is totally worth for unlocking certain features.

•Facebook for meaningful relationships after you have been able to meet with an investor once or twice. It is critical to build the relationship to generate trust.

•Twitter for thoughtful conversations and engagement with relevant information shared by the investor

Blogging is one of the most underestimated methods of attracting inbound attention, telling your story, progressing potential investors through the thought process of wanting to invest in you, and remaining visible through each series of fundraising. Even without a website or blog of your own yet, you can publish via Medium or LinkedIn.

Moreover, another good option is to go to the blogs of the investors that you are looking to target. They all read their comments and often engage with responses. Leave a thoughtful comment to get noticed and start building the relationship from there.

Investors that are probably the most active right now on blogs include:

Simple emails have proven to be able to get the attention of notable angel investors and VCs. They’ve even be responsible for the launch of some very important and notable startups. Here are 3 Proven Email Templates That Helped Entrepreneurs Raise Millions .

6) Apply to Accelerators

Popular startup accelerator programs always have an open invitation for applications from serious entrepreneurs. If accepted, you’ll likely get a modest check to keep developing your work, as well as introductions to other investors, business advice and help in staging future fundraising rounds. Just make sure you know the terms and look for a good fit before you apply, or accept the help.

Typically Accelerator programs include a demo day. This is when the startups attending the program pitch to a crowd of investors. I listed recently the ones to highly consider in the piece 10 Startup Accelerators Based on Successful Exits.

In the event the accelerator that you are considering is outside of the list included in the piece above, I would highly recommend to do extensive research to verify the type of success stories and the track record from such program. You may be better off using that equity that you intended to allocate to the Accelerator to create instead a very active board of advisors and incentivize them to help with making investor introductions.

7) Start Sharing Your Product

Fundraising and growth needs to be strategic to be successful. Yet, far too many entrepreneurs and startups aren’t focusing enough on just getting their product or service out there in the hands of customers, influencers, and in turn, in front of investors.

If you can acquire real customers, you will be under less pressure to seek outside money. When you do, you can achieve better terms, from better investors.

If sales are tough, then there are freemium and hybrid business models that can help get your product in the market, and starting to generate some buzz.

Finding investors for a new business venture is one of the most difficult challenges an entrepreneur faces. A business cannot begin operating until it has sufficient funding, and banks and investors typically subject start-ups to more scrutiny than established companies. Finding investors for a child care center presents a unique set of challenges because of the required investment in educational materials as well as higher salaries that skilled child care professionals command.

Use Capital IQ to research banks and investment funds that have recently invested money in child care centers or other businesses focusing on children. You will need to establish an account with Capital IQ, which costs $500 for a year-long subscription. Capital IQ is a research portal that is widely used by investors and other professionals in the finance industry. The website is particularly helpful in searching for investors because it lists the companies in the portfolios of banks and private equity firms. Capital IQ also allows you to screen for institutional investors that have a stated focus on specific industries, such as the child care industry.

Use LexisNexis to search for news articles that discuss recent investment activity in the child care industry. An account with LexisNexis costs $300 for a year-long subscription. LexisNexis is a service that consolidates news articles from a variety of publications, and it will help you identify stories about smaller, individual investors who may be interested in backing your child care center.

Search for venture capitalists and angel investors in your area using vFinance. vFinance is a directory of private investors that allows you to search by industry, stage of investment or size of investment. Click on the “Find Capital” tab on the website’s homepage to begin your search. The website’s basic service is free, or you can sign up for a premium account.

Use OneSource to search for other child care centers that may be interested in structuring a joint venture investment with your center. OneSource is the leading directory of small and mid-sized private businesses, and it allows you to search by industry or by Zip code. You can sign up for a free trial on the website’s homepage or establish a permanent account, which costs $200 for basic services.

Contact the United States Small Business Administration, and apply for a loan or grant for your child care business. The SBA provides loans and grants to thousands of small businesses each year. You can download an application from the SBA website or you can speak with a loan official, who will guide you through the application process.

Some banks or investors may ask you to pledge personal assets, such as your house or personal savings, as collateral for loans. Be very careful in pledging personal assets; if you pledge your house as collateral and your center is unable to repay the loan, you will likely lose your house to the bank.


Be sure to review any financing documents with your lawyer before signing anything.

One of the most difficult tasks, for any entrepreneur that wants to start up their very own small business, is to raise capital for it. Simply put, capital is the amount of money the business has available to spend on various business activities. Raising capital is never an easy task and often requires a lot of determination and patience.
There are a number of ways that an entrepreneur can raise capital for their small business, however, before using any capital collection methods, always remember to have a business plan to show to your investors. A business plan simply states the nature of the business, the objective, the mission statement, the business goals, costs, expenses, staff and everything business related.

Below are a few ways that a small business owner could raise capital for their business. Keep in mind that should one method of capital collection fail, then another one should be tried.

Raise Capital from Friends

A person can always contact their close friends to get some money to raise capital. Close friends are always there when you need them; however, make sure that there is something in it for them. Think about why they would simply lend you money?
You can ask for money and then pay it back with interest and within a payback period, or you can add them on as partners in your business. Regardless of what you decide to do, just remember, you have to be upfront and honest with your friends, otherwise you will not get the money, even from your friends.

Angel Investors

As the word states, angels are always a good point of contact when you need to raise capital for a small business. In a business sense, angels are the not the biblical divine beings, instead, they are very rich individuals that enjoy helping entrepreneurs in their business ventures, should they be good and credible enough.
Just remember that angels are professionals that need to see a proper business plan before they will even think about investing.

Family Members

Family members can be an entrepreneur’s first point of contact to raise capital. The thing about family is that they will always be willing to help and support a good idea with financial aid. The bond between families is very strong and even if you do not have a very good business plan, you will still be able to get money from your family.
Keep in mind that the amount of money collected from family members may not be enough; however, it is a start.

Private Investors

Stepping into the business world will almost definitely require you to deal with private investors. Private investors can be contacted in order to raise capital for a small business. Private investors are always willing to invest money into new and strong business ventures due to their hope of getting a large return on their investment.
Private investors are professionals in the business world and usually have years of experience in investments. As a result, you must make sure that the business venture you want to follow is profitable and has a solid business plan otherwise private investors are unlikely to be of assistance.

Venture Capitalists

Contacting venture capitalists is also a great way to raise capital; however, it is often one of the hardest. You see, venture capitalists have very strict terms for their investments. Very few small businesses have been successful in getting finance out of venture capitalists.
If you successfully do pass the requirements set by the venture capitalists, then you will get all the capital you need to start up and operate the business.
In addition, venture capitalists will also be able to provide sound business advice and help you make business decisions so that your business grows and survives the business world. Of course, if the business does well, venture capitalists will also take a return on their investments.

Raise Money from Banks

One great way of generating capital for a small business is to contact a bank for a loan. Most banks would be happy to provide a loan to an individual provided their credit rating and history is good. In addition, banks will also need to see the business plan and all expected expenses and sources of revenue before they provide the loan.
Once the loan has been provided, you must pay it back to the bank, with interest.

Entrepreneurship Supporting Institutions

There are actually specific banks for entrepreneurs. Entrepreneurs can go there, pitch their business venture, and if feasibly, the entrepreneurial bank will help provide the capital needed to conduct business activities.
The best part about these institutions and banks is that they provide allow for a longer payback period meaning that you have more time to generate profit.

NGO’s, or non-governmental-organization, are also very helpful in raising capital for a small business. Keep in mind that the NGO may not be able to provide financial assistance directly, however, they will able to guide you in the right direction to reliable sources of capital generation.


Sometimes, an entrepreneur can reach out to their customers in order to raise capital. How? Well, at times, you can charge a customer for a product or service before you actually provide it to them. Essentially, take an upfront payment.
Many a times, customers would be more than happy to make an upfront payment if the product or service is worth it for them.

Investment Bankers

This should be the last attempted source of finance; after all other sources raising capital have been tried. Essentially, investment bankers are able to help an entrepreneur raise the capital they need for their small business but they must go to the general public for help.
This means that you may end up losing some ownership of your business since your business will be divided into shares offered to the general public.
As you can see, there are a number of ways to raise capital for a small business. All it takes is the right course of action, a solid business plan, great determination and patience.

Raise the money you need by proving to investors that you’ve done your homework and are willing to sacrifice.

I’ve been working with entrepreneurs now for close to 25 years, and throughout that time one thing hasn’t changed: Only 5 percent of all entrepreneurs get funded. Can it be that only 5 percent of the ideas generated are good enough to succeed? Why is it that this “magic” number never seems to change?

I believe there are three fundamental reasons contributing to this impasse. Finding ways to address these issues could significantly improve the flow of viable, creative ideas in this country and have a dramatic impact on our economy.

1. The system for evaluating entrepreneurs is arbitrary and inefficient. When you think about it, the methodology investors employ to find and qualify a potentially viable entrepreneur places almost all the responsibility on the entrepreneur. Once they have an idea, they must take the initiative to package it and promote it all to potentially interested parties. There’re two problems with that system:

  1. It’s the entrepreneur who decides what information gets presented, and
  2. Everyone who receives this information must process it from a cold start.

To illustrate how ridiculous that system is, it would be the equivalent of you going into a bank to ask for a loan and instead of filling out their application form, you just created your own. How would the banking system operate if everyone made up their own application? What entrepreneurs need is a scoring system similar to the one Venture Alliance uses to determine if you’re really ready to get in front of professional investors. It’ll also help you find quality resources if you’re not. What the system won’t do is help you bridge the gap between having a need for capital and actually being ready for it. That part is up to you.

2. Entrepreneurs don’t understand the difference between having a need for capital and being ready to ask for it. In a system where the entrepreneur chooses the application, it’s not surprising that their timing for when to submit that application is often out of sync with the very investors they’re trying to impress. Why? Because entrepreneurs are motivated to seek capital based on need, not readiness. What do I mean by that? Here’s the difference. When an entrepreneur is driven by a strong sense of need, the message they send to an investor is one or more of the following:

  1. I need you to bail me out of my bad management of the limited capital I had.
  2. I’m unwilling to invest any more of my money, so I need yours.
  3. I haven’t been able to raise money from anyone else, so I need you to save me.

On the other hand, when an entrepreneur has “done their homework” and truly understands what it takes to run a business, the message they send is:

  1. I’m ready for a partner to help me take this to the next level.
  2. I have a handle on my product, my market and my customers, and I’m ready to accept an investment that’ll help me grow.
  3. I’ve researched the various sources of capital available to me and I’m ready to work with you because you’re the best match.

Since most entrepreneurs are unwilling or unable to determine when they’re truly ready, one goal of a good rating system should be to make that call.

3. Entrepreneurs often struggle over whether to fork over their own money vs. paying someone who won’t deliver, leading to a freeze on progress and a slow painful death of their vision. Admittedly, the entrepreneurial industry is flush with charlatans just waiting to take advantage of a vulnerable entrepreneur. However, a far bigger problem is that many entrepreneurs with absolutely stellar ideas simply don’t understand that building a business requires tons of sacrifice (including money), and they’re just not willing to pay the price. So how do you deal with this conundrum? There are two ways to approach it:

  • From the investor’s perspective: We’ll always look for entrepreneurs who demonstrate to us their willingness to “put their money where their mouth is” and who clearly “have skin in the game.” If we don’t see indications that they believe in their vision enough to invest their own hard-earned cash, then we won’t invest either.
  • From the entrepreneur’s perspective: Don’t hire anyone without checking their references thoroughly. Talk to previous clients. Be wary of “guarantees.” Look for resources that’ll take at least part of their reward based on the success of their service. That way, they know they must perform to get paid “the big bucks.”

Running your business should be a lot like running your household–you know it’s going to cost money and your resources aren’t unlimited. So, be prudent on how you invest your limited capital, but realize that an investment is required. Have a plan and follow it as long as it’s working. Be flexible, be tough and be open to new ideas. Not every thing will work as you planned.

Jim Casparie is the founder and CEO of The Venture Alliance,a national firm based in Irvine, California, that’s dedicated to getting companies funded.

Need an investor to help you grow your startup? Here's how to find an investor and which types to look for.

One of the most important aspects of running your business is finding funding. Between venture capital, traditional bank loans and online crowdsourcing, there are now more funding options than ever before, but it's critical to choose the right type of investor.

Editor's note: Looking for the right loan for your business? Fill out the below questionnaire to have our vendor partners contact you about your needs.

Benefits of business investors

The biggest benefit of finding a business investor may be obvious: They give you money to run your business.

Businesses need capital to grow, and working with business investors means you don't have to grow the old-fashioned way – by building your business slowly, brick by brick. Instead, you get a cash injection and your business can expand rapidly.

This is most notable with some Silicon Valley startups. Many prominent technology companies needed massive amounts of cash quickly in order to scale their offerings and meet immediate demand.

However, finding funding isn't as simple as convincing investors to give you large amounts of cash. Seeking investment means trading something for the access to funding. With venture capitalists and certain angel investors, that can mean equity in your company, which in some cases could mean that they have decision-making power on major company issues. With banks, you're borrowing money, so you're paying a premium, or interest rate, on the amount of money the bank lends you. This also has strings attached, as many banks want to know how you plan to use your loan before they issue it. With online crowdfunding platforms, you may be trading inside access or even equity for funding. [Read related article: Private Equity vs. Venture Capital: What's the Difference?]

Working with investors is a great way to take your business to the next level, but it's a trade-off no matter who provides the money. When seeking funding, you need to weigh your options and consider what you have to give up to get the funding you need. This doesn't have to be a cutthroat approach; it's more of an important distinction to understand in order to approach the funding with a successful mindset.

How to find a business investor

Finding investors can be one of the biggest challenges of starting or running a business. In general, it's best to start small and move toward bigger options later – in terms of whom you seek fund from as well as where you look for funding.

As a small business or startup, look to your local community first. Cities and small towns are constantly developing business initiatives to get businesses to grow locally. If your nearest city doesn't support the industry you're moving into, spread your search a little at a time until you find one that does. Depending on your business type, you may have to go to where the money is.

Once you have a business concept, a product or service, and a plan, you're ready to start looking for funding. Here are five ideas to help you search for a business investor:

    Work with friends and family. Start by trying to find funding from your friends and family. This can be the best option for you to get your business up and running without proving yourself to an outside investor.

6 types of business investors

It's best to move from small to large funding sources as your business grows. This order, while not set in stone, is a good general focus.

    Friends and family: The first place to look for funding is with your friends and family. Especially if you're a new or emerging business, pitching to your friends and family can be a great way to get your business off the ground.

How to attract an investor

It's easy to get a general idea of how to find funding, but attracting the right investors and perfecting your business's sales pitch can be extremely difficult.

Before diving in, understand that any investor you work with should be viewed not just as a funder but as a business partner, so it's best to work with like-minded individuals. Especially when equity is on the table, investors with a large enough stake in your company will make sure their voice is valued. These kinds of partnerships can be advantageous, but also very detrimental if they're forged on the wrong values. When thinking about how to attract investors, keep these main steps in mind.

1. Develop your company mission.

As part of your business plan and general business growth, you need a company mission to build around. Investors want to know your "why" – the reason you think the world needs your product or service. You should be able to communicate what problem your business solves in one or two sentences. If your mission and goals are too complicated, you'll lose investors and customers alike. You need a simple and clear explanation of your business's value to be successful.

2. Flesh out your brand voice.

One of your most important tasks as a small business owner is building your brand and company voice, which is the most outward-facing aspect of your business. Investors look for brand value, especially when it comes to social media and presence in your local community. By marrying a strong company mission with a distinct, well-developed brand voice, you're halfway to finding the right investors.

3. Take as many meetings with potential investors as possible.

Finding the right investors means meeting with as many potential investors as possible. Accept any opportunity to talk. This will not only help you hone your business's sales pitch, but also to read potential investors and decide who would make the best partners. Finding funding is often a process ridden with rejection and judgment. By taking as many meetings as possible, you'll increase your chances of finding funding.

4. Keep at it.

Don't get discouraged when potential investors decide not to fund your venture. It's part of the process. Do your best to focus on the next opportunity. When things get difficult, fall back on your business's mission to remind you what you're trying to accomplish. Remember that if even only one investor agrees to fund your business out of 50 you meet, that's still success.