where do you find investors?

[Anonymous]

Besides going to the bank and asking them to lend you money, let's say you don't have enough money as a down payment for the requirement. Where do you find partners and investors who will lend you the money? Is there a website or do you just have to know someone? Also, friends and family won't count unless they have 700k+ to lend you. Any ideas? 

[Anonymous]

Shark Tank.

[tacpoly]

So you want someone to put in $700K into your venture...  What / how much are you putting in?  Or are your investors supposed to take on 100% of the risk?  How much ownership are you giving your investors? 

[Anonymous]

Besides a bank, I would say most of it involves networking.You would still need to do some kind of business plan before they invested.

Who will buy the product?

How much will it cost to produce the product?

What are your margins and how much do you need to sell to break even every month?

How long will it take for them to get their money back?

Who are the competitors and how does their product compare to ours?
How much does the competition charge for their product?

Those are just some questions that you need to think about in a business plan. An investor or bank will be asking those types of questions, so be prepared to answer them. As for finding investors, you can usually network at various places. Look up local assocations involved with business. Even look into local colleges or universities. There are plenty of professors looking for class projects to help new companies and to give their students real world experience. I know a local university here that has a startup week.

[Anonymous]

It's a hypothetical question but I would not provide ownership. They would have limited liability on their end for partnering up with me and of course the contract would state that they will be repayed at such and such time with how much interest we agreed on. I would also pull in some of my money that I've made in addition to pulling out my equity to supply the rest. I would end up paying everyone back before the bank but my goal would be two fold. Taking out equity from my investment and apply the same concept! I'm just not sure where I would find investors because I can do this on a smaller scale too... 

[Anonymous]

I will keep these questions in mind. Thank you. 

[tacpoly]

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@Anonymous wrote:

It's a hypothetical question but I would not provide ownership. They would have limited liability on their end for partnering up with me and of course the contract would state that they will be repayed at such and such time with how much interest we agreed on. I would also pull in some of my money that I've made in addition to pulling out my equity to supply the rest. I would end up paying everyone back before the bank but my goal would be two fold. Taking out equity from my investment and apply the same concept! I'm just not sure where I would find investors because I can do this on a smaller scale too... 

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You're very vague, but this is something concrete:  I personally wouldn't consider parting with that chunk of change if all I'm going to get is interest on a loan.  I could invest that money myself.  You're need to firm up your plans before you can even shop your idea around (see above post).  Oh, and you will have to sweeten the pot unless you are planning to invest a lot more than $700K of your own money. 

[Anonymous]

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@tacpoly wrote:

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@Anonymous wrote:

It's a hypothetical question but I would not provide ownership. They would have limited liability on their end for partnering up with me and of course the contract would state that they will be repayed at such and such time with how much interest we agreed on. I would also pull in some of my money that I've made in addition to pulling out my equity to supply the rest. I would end up paying everyone back before the bank but my goal would be two fold. Taking out equity from my investment and apply the same concept! I'm just not sure where I would find investors because I can do this on a smaller scale too... 

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You're very vague, but this is something concrete:  I personally wouldn't consider parting with that chunk of change if all I'm going to get is interest on a loan.  I could invest that money myself.  You're need to firm up your plans before you can even shop your idea around (see above post).  Oh, and you will have to sweeten the pot unless you are planning to invest a lot more than $700K of your own money.

Certainly there are people out there who disagree with this. Take people who invest in bonds for instance. They lend the company the money with limited liability on their behalf because they can't lose anymore than they have invested. The company repays them interest payments and pay their principal off in a set number years. They have no stake in the company but their loan. It's the very same concept of how I would borrow the money. I would have investors come in and invest in my business and I would essentially control and run it. They would only help finance me just as the bank did so my only responsiblity to them is to repay them with a set amount of interest. If everything falls apart, my credit will take the hit but the bank and my investors will have a physical collateral to sell to recoup cost and I walk away almost scotch free. Sounds interesting right? 

[Anonymous]

well maybe not entirely scotch free because I have some percentage of my own money invested but that's the worth things that could happen. I'd lose my investment. 

[wasCB14]

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@Anonymous wrote:

Certainly there are people out there who disagree with this. Take people who invest in bonds for instance. They lend the company the money with limited liability on their behalf because they can't lose anymore than they have invested. The company repays them interest payments and pay their principal off in a set number years. They have no stake in the company but their loan. It's the very same concept of how I would borrow the money. I would have investors come in and invest in my business and I would essentially control and run it. They would only help finance me just as the bank did so my only responsiblity to them is to repay them with a set amount of interest. If everything falls apart, my credit will take the hit but the bank and my investors will have a physical collateral to sell to recoup cost and I walk away almost scotch free. Sounds interesting right? 

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Bond investors generally do not get equity participation (unless there's some conversion feature), but underwriters often impose covenants. For example, a borrower may be required to stay under a certain debt-to-equity ratio.

Is this related to your other thread? Are you asking about loans to acquire and manage real estate, or some other business? That might clarify things for myself and others.