How Do You Attract Investment to a Small Company? Four Perspectives

Situation: A small company seeks outside investment to support its growth. The company’s industry is dominated by large, well-recognized players. These companies have historically been the company’s customers; however, they have a quarterly mindset, and are increasingly looking to support their own development groups. How do you attract investment to a small company?

Advice from the CEOs:

  • What is the company’s ROI and risk profile?
    • Positive ROI, particularly taking advantage of new distribution channels.
    • ROI turnaround is typically 1-2 years.
    • There are about 50 similar companies in the market.
    • The company possesses intellectual property that makes it appealing.
    • Project maturity is generally considered a risk in the industry – it is not as experienced or mature as other industries.
    • An additional risk is that new developments in online distribution are continually changing the industry environment in unpredictable ways.
  • Investigate and approach companies in other industries with similar structures – dominated by large players but with a healthy presence of smaller companies. Examples include the movie industry and real estate pools.
    • Talk to investors who are familiar with these industries to see whether they would be interested in investing in the company’s projects.
  • There is a good deal of money out there looking to beat the current returns available through the stock market and paper investments. Look for an angel investor.
  • Given the Risk/Reward structure of the industry, approaching professional investors may be the best bet for the company.

[like]

One thought on “How Do You Attract Investment to a Small Company? Four Perspectives”

  1. Paul Mailhot

    One way to attract investment is by showing a record of profits and dividend payments.
    A company seeking investors has two personas to pitch to: Investors to finance the operation and, Clients to generate revenue and profit.
    Both are of vital importance to a company’s survival and growth.
    You don’t need to build offers yourself to reach these personas. There are financial publicists and venture capitalists who can help you put together professional offers.
    As a marketing Copywriter I have seen “small caps” who in my opinion, overly focused on “Financing” while “Marketing & Sales” languished.
    Cheers,
    Paul

Comments are closed.