Whenever businesses send out their proposals for financing partnership, they are likely to get multiple offers. When you too get multiple offers, how do you go about finding the best offers? If you are not cautious in reviewing all the offers you get, there are chances of ending up with the wrong investor and missing the best ones. You need to have stringent selection criteria when selecting your offers to ensure that you identify partnerships that last long.
An important criterion that should guide you in this process is long term business association. Always look for financing partnerships that would last long. This will help in business growth and sustainability. This will also help in creating a win-win situation for you and for the investor. When you grow, your business funding partner will also reap higher returns. By establishing long term association with an investor, you will be able to establish stable funding channels, which will in turn allow you to execute your business ideas and take your business to the next level without having to waste a lot of time looking for funding options every time you plan to scale up. While screening your offers you must check who will align with this goal of long-term association.
It would be all the better if your investors come with prior experience funding similar businesses in similar industries. They will be able to bring their share of expertise to your business and help you leverage the maximum out of the investment provided. They should also align with your vision. It is very difficult to work with an investor whose vision does not align with the vision of the business owner. You might want to ask for a personal consultation appointment with the investor before finalizing to ensure that you will be travel with them and that the vision aligns. For example, an investor might want to make quick money and exit but as a business owner you could be planning to build a more sustainable business that will fetch long term returns. There is a clear mismatch in the expectations of both parties. You will know of such mismatches only when you have a detailed discussions with the investors. Make it a point therefore to allocate enough time to understand your needs and the needs of the investors. Profile matching is very crucial when you are trying to find the right investor.
You should also do a thorough review of the financing capabilities of the investors. If you work with a financing partnership agency, they will take care of this factor when they are matching your profile with the investor profile. At times, the investors will express their interest and release the first installment of funding but they may not have the required funding capacity and may not be able to release any subsequent funding. When you happen to choose such investors, you will put yourself in a disadvantageous position, make careful choices when selecting your investor.
