Published on

Work

How To Find The Best Investors For Your New Product

Written by Joel Goldstein
Entrepeneur

So you have an idea for a great new product. Now what? Believe it or not, there are plenty of other ways to find investors for your product besides facing the sharp-tongued panelists of the ‘Shark Tank’. If you need start-up capital to begin manufacturing your product but don’t know where to start, then this article is for you.

There are many successful business people out there with deep pockets who are willing and eager to fund promising ventures. If you have a promising product and something to offer a potential investor, then many will offer you the investment you need to get your new product into the consumers’ hands. Here is how to find investors for your new product:

The first step to finding investors for your new product is to know the types of investors that are out there. The main types of investors include angel investors, banks, peers and personal investors. Here’s the breakdown on each of these types of investors:

Angel investors:

Angel investors are the private, high net-worth individuals who generally are past entrepreneurs. In exchange for their initial investment, an angel investor may want a percentage of return on his investment or he may ask for partial ownership in the company and a say in management decisions. It’s all up to the initial investment contract.

Business loans:

Many entrepreneurs choose to acquire their investment capital from a bank in the form of a loan. A bank will require the entrepreneur to describe her business and present a business plan, and then will decide whether or not to provide the loan.

Peer-to-peer lending:

Peer-to-peer lending is another type of investment situation in which investors and small business owners are brought together via an investment website. Entrepreneurs create a profile and post their business plan on the peer-to-peer lending website, and potential investors bid on investing in the business.

The product owner and the investor, who is usually a private individual, negotiate the interest rate for the investment, and then the lender supplies the funds to the entrepreneur.

Personal investors:

When family and friends invest in your product or start-up, they’re considered personal investors. As with any investment, it’s important to use an investment contract that outlines the size of the investment, the rate of return and any ownership agreements that may be established when dealing with personal investors.

Now that you know the types of investors that are out there, you have to take a look at your product and your financial situation in order to decide the type of investor that would be right for you.

When the time comes to approach an investor with your product, it’s vital you know how to present to investors. Your product presentation will make or break the future of your product.

You should be thoroughly prepared for your presentation and ready to wow investors. When you present to investors, you should:

– Be confident.
– Be ready to answer questions and explain facts, figures and numbers.
– Have a visual representation or prototype of your product ready.
– Get to the product demonstration quickly to keep audience engaged.
– Use anecdotes to serves as real-life customer testimonials.
– Explain to investors how their investment will benefit them and provide a return on their investment (ROI).

With an investor backing you, you can start to manufacture your product and secure a distribution agreement. An independent distributor network like Mr.Checkout Distributors will introduce your product to over 1,000 independent distributors and help launch it into a network of more than 35,000 retail locations.

Finding an investor who believes in your product is the first step to nationwide retail success!

Featured photo credit: Marc Puig via flickr.com