Use the Internet to find investors
Question: I recently have launched a business that offers new products and services for digital photos. Where can I attract investors?
Answer: Start-up entrepreneurs often fund their own ventures with existing assets or by obtaining bank loans. Another option is to raise money by asking people you know -- friends and family members -- to lend you the money. Make sure you have written agreements with these people.
Outsiders, such as venture capitalists or “angel” investors, don’t typically fund early-stage business concepts unless their backers have strong, successful track records in the industry. There are certain angels who specialize in contributing seed money to promising start-ups, however. If you can demonstrate that your new company has excellent potential, consider sending your business plan to those kinds of investors.
For a directory of angels, visit the website of Angel Capital Assn. at www.angelcapitalassociation.org. You also should ask your accountant or attorney for referrals, since business advisors often help match entrepreneurs with investors.
If you lack professional connections and cannot self-fund or get loans from friends, check out websites such as RaiseCapital.com.
For $30 to $50 a month, the site allows entrepreneurs to showcase their business ideas to potential investors who visit anonymously. Owners of start-ups and established small firms can post text descriptions, pictures and video presentations about their companies on the website.
“We seek to make the quest for funding more democratic and seek to serve a diverse universe of entrepreneurs from all backgrounds, income levels and locations,” said Richard Singer, RaiseCapital’s chief executive.
Although Singer doesn’t track how many successful deals result from introductions made on the recently launched website because potential investors contact entrepreneurs directly, feedback has been positive from both sides of the aisle, he said.
“Savvy investors realize that the next big business ideas sometimes come from the least-obvious sources,” Singer said.
Be proactive to help attract more clients
Q: I seem to have equal trouble attracting quality clients and closing promising sales. Any advice?
A: Don’t wait for quality clients to be attracted to your products or services -- go out and actively search for them.
Your best referrals to new clients will come from your existing clients, said Joanne S. Black, a Bay Area sales consultant. “You don’t want just anyone. You want clients who match your criteria: clients who will be profitable for you, who won’t nickel-and-dime you and who will gladly refer you to others,” she said.
Touch base with your best existing clients regularly and ask how their businesses are doing and how you can help them. Listen carefully and follow up on the suggestions they make. Then specifically request that they let their vendors, suppliers, friends, customers and relatives know that you’re looking for new clients.
“Existing clients are the best and most underutilized source of new clients,” Black said. “They will be thrilled to refer you -- if only they’re asked -- because they want you to be successful.”
To answer the second part of your question: Sales is not typically about “closing the deal.” If you’re having problems nailing down a sale, something probably is awry in your general sales process.
“Step back and take a look at the bigger picture. Make sure you have contacted all of the key players and gotten buy-in from them,” Black advised. “If you have presented value and emphasized the business benefits that your clients will receive, closing should be an easy next step for your client to take: He will close himself.”
Got a question about running or starting a small enterprise? E-mail it to karen.e.klein@latimes .com or mail it to In Box, Los Angeles Times, 202 W. 1st St., Los Angeles, CA 90012.
