How to get investors for a startup business

One of the biggest challenges facing anyone starting a business is how to find the money for you need.While you may have the hottest and best idea ever the only trouble is you need money (also called venture capital) to get your startup business off the ground. While it can seem daunting there are steps that can help you get the capital that you need.Here is what you need to know about how to get investors for a startup business-

• Make sure you have rights to your intellectual property-You want to make sure that you get your idea patented to make sure you are the sole owner of your idea. What's going to most excite potential investors is knowing that they are the only ones who are in on this amazing idea. If some other company can come in and steal it from under you, then investors worry that their money could go for nothing. You need to take the time to get the proper patents.
• Create a legal entity for your business-This is imperative that you do this from the beginning. When you are operating a business, you want to keep your business finances separate from family finances. There are many reasons for this but one of the main ones is that it gives you some legal recourse should someone decide to sue you (they can only get at the company) and it establishes the expenses of your business as legitimate in the eyes of the government and most importantly the IRS Keep in mind that the rules to incorporate in each state are slightly different, but usually for a thousand dollars or less you can be a fully recognized corporation.
• Start thinking of people who may want to invest in your business-After you have taken the above steps now you can start to actively recruit investors.Investors can be friends, family and even the guy who steams the milk for your latte in the morning. You should also include any ideas you have for big investors. Keep in mind that if you have your patents in place to protect your intellectual property and if the big boys are interested, they will simply pay you handsomely to step aside.
• Develop an air-tight presentation of your business-This presentation should include what the product is, why there is a huge demand, the cost to make the product and how much you are going to charge for the product. And do not forget to include how you think the product will be advertised. This is where you should spend some time and money to really make an impressive package. Keep in mind that this should not look like a high school book report but a business that is about to start flying.
• Start contacting the people on your investors list and make appointments to sit down with them.The most important thing is to be confident about your business. Keep in mind that if the investor does not feel that you can see your idea to a full production the money will most likely stay in their pocket.
• Offer your investors shares of stock-Remember that what you are asking for is an investment not a loan or a gift.Your investors will expect something in return for the risk they will assume. When you incorporate your company, you will be awarded shares of stock. (The amount will be different based on the type of company you set-up.) By trading the investor's money for shares of stock they are now fully invested. It is important to understand that this language should be handled by a business attorney so that there are no questions down the road. Also it is important to remember not to give away too much of your company as you may need additional investors down the road.