Is money preventing you from quitting your day job to pursue your dream full time? If so, then welcome to the Buy Your Freedom mini-series.

Did you know that there are three simple actions you can take right now that will allow you to save the money you need to pursue your dreams? It’s true! And we’re discussing all three. The first was: spend less. The second was: earn more. The third is: find an investor.

  

Action#3: Find an Investor 

Investors come in many shapes and sizes. Picking the one that’s right for you depends on a number of things, like your business idea, your experience, your credit, and how much of your own money you are willing to invest. Traditional lenders, like banks and credit unions, will consider lending you money based on your business plan. If your idea is too new, risky, unproven, or offbeat for a traditional lender, then private equity might be a better fit. Private equity lenders, typically venture capital (VC) firms or angel investors, allow you to finance your business with the money of institutional investors (e.g. banks, insurance companies, retirement or pension funds, hedge funds and mutual funds) and high net worth individuals. One source of venture capital is the Small Business Investment Company (SBIC) program, which is a group of venture capital firms that are licensed and regulated by the Small Business Administration (SBA). Angel investors, on the other hand, can be anyone from successful entrepreneurs right down to Mom and Dad.

So how do you find the right investor for you? Network, network, network! Make sure you’re pitching your idea to anyone and everyone who will listen, especially:

  • Colleagues and business associates – these people know you and your professional track record and they may be interested in helping finance your idea.
  • Your colleagues’ and business associates’ collegaues and business associates – don’t be afraid to ask your contacts to connect you with their contacts (a practice commonly known as “netweaving”); this can expose you to an entirely new realm of potential investors.
  • Friends and family…and their colleagues and business associates – Your friends and family are the people who know you best and they’ve probably had a front row seat as you’ve started chasing your dream. If anyone is interested in helping you turn your dream into a reality…it’s most likely this group.

Regardless of which type of investor you decide to pursue, you will want to begin at square one: developing a business plan. As you can imagine, a business plan will greatly help your cause by not only showing potential investors that you’re serious, but also that you plan to recoup their investment…and then some.

Need help writing your business plan or beginning your search for an investor? The SBA provides you all the resources you need to get started…free! Check it out: www.sba.gov.