Equity investment in small businesses has more than doubled in the last 3 years, a report by the British Business Bank has found.
Figures show that more small businesses are choosing to sell ownership interests in their business to raise capital. The number of equity deals completed in the first 3 quarters of 2014 was up by 170% on the same period in 2011.
Tips for attracting investors
Selling a stake in your business can help you raise funds without getting into debt. To get your planning started, here are some tips for attracting investors:
- making sure that your business plan is solid will help convince potential investors that your business is sustainable
- value your business realistically so that investors can get a feel for your operation and its potential
- give your investors a workable exit plan that sets out how and when investors would be able to get their money back
- always remember that the main motivation of an investor is to make a good return on their investment, so make sure your plans enable them to do so.
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