You've come up with a business idea and put together a solid business plan. Now it's time to secure an investor and take your business to the next level. Easy, right?

Not quite. With all the noise, distractions, and competition out there, finding investors to fund your small business is not an easy task. But with a solid business plan, a stellar pitch, and a lot of persistence, you're on your way to making things happen.

Learn how to find investors for your business and set yourself up for success. 

Table of Contents

• 9 ways to find investors for your business

1. Crowdfunding
2. Business accelerators
3. Angel investors
4. Venture capital
5. Family and friends
6. Networking
7. Small business loans
8. Small business grants
9. Bootstrapping

• How to prepare for investors
• Are you ready to start your search for investors?
• FAQ

9 ways to find investors for your business

The thought of having to go out and find money for your business can feel overwhelming. But you have plenty of options.

Take a look through this list of strategies to find investors for your business, and see if any of them stand out.

1. Crowdfunding

Crowdfunding involves raising small amounts of money from a large number of people, typically online.

To find investors, you can sign up on popular crowdfunding platforms such as Kickstarter, GoFundMe, or Fundable.

You write up a pitch, set your fundraising goal, and set a deadline. Then you work on promoting your campaign to get people excited about your business idea.

There are different types of crowdfunding, including:

• Equity-based. You take money from investors to start your business and they receive a small amount of equity in your company in return.
• Reward-based. People invest in your company and, in return, you provide some sort of non-financial reward.
• Donation-based. People donate money without expecting anything in return.
• Debt-based. People donate to you with the understanding that you'll pay them back, with interest.

Pros:

• You can reach a large number of potential investors.
• There's potential for investors to become customers.

Cons:

• You will have to pay fees or a percentage of your funds raised.
• You might not raise your funding goal.

2. Business accelerators

Business accelerators work with startups to provide mentorship and support through each stage of business development. Accelerators help business owners access investors, providing networking opportunities and even office space.

To get started, you must complete an application process and get accepted to the accelerator program. Accelerator programs often last a series of months, with the goal of helping your business grow.

Y Combinator is a popular online business accelerator that has helped launch businesses such as Airbnb and DoorDash.

Examples of Canadian accelerators include HATCH Venture Builder at the University of British Columbia, Black Founders Network at the University of Toronto, and Creative Destruction Lab at the University of Toronto.

Pros:

• You gain access to mentors and a peer network.
• You secure access to investors.

Cons:

• The application process is highly competitive.
• The process involves an intense amount of work for a set period of time.

3. Angel investors

Angel investors are wealthy people who want to invest their money in a startup they believe in. In exchange for their investment, they typically require a certain amount of equity.

The entrepreneurs on shows like Dragons' Den and Shark Tank are well-known examples of angel investors.

You can start looking for an angel investor on networks like Angel Investment Network or National Angel Capital Organization (NACO).

Pros:

• You can use the money to start or grow your business.
• In some cases, the investor can also act as a mentor.

Cons:

• You have to give up equity in exchange for funding.
• The funding amount might be less than with other options.

4. Venture capital

Venture capital (VC) is another form of private equity that helps fund established startups and businesses with growth potential.

While angel investors are wealthy individuals willing to invest, venture capitalists are a group of professional investors who work for a VC company. The money they invest is not their own — it comes from financial firms, insurance companies, and pension funds.

If you want to pursue venture capital, check out BDC Venture Capital. It offers funds for a range of businesses, such as those that focus on sustainability and climate tech, as well as women-led businesses.

Pros:

• You can gain business expertise from VC investors.
• Venture capital can help your business grow faster.

Cons:

• Venture capital typically focuses investments in tech.
• You will have to give up equity in your business.

5. Family and friends

For many small business owners, their business wouldn't exist if it weren't for the support of those closest to them. But it's not always easy to ask the people you love for money — and the stakes are high. Bad business deals have been known to ruin relationships.

Before asking your friends or family to invest, make sure you have a plan. Treat them like any other potential investor. Prepare your pitch and materials, and determine how to structure the investment.

Are you going to give them equity in exchange for their investment? Will you treat it like a loan? If so, will you pay interest? Or do they want to give you the money as a gift?

The more details you can work out before money is exchanged, the more you can protect your relationship.

Pros:

• You have a personal connection and built-in support.
• There's potential for no loss of equity or no debt.

Cons:

• A bad business deal can ruin important relationships.
• You may feel more stress to succeed because it impacts your loved ones. 

6. Networking

If you want to find an investor, work on expanding your network and building relationships. Attend conferences, trade shows, and other industry events.

Ask your friends or family members to introduce you to potential investors. Reach out to people in your network who have gone through the funding process before and ask them for advice.

Or start posting about your business and let your network know what you're looking for.

Pros:

• You have an opportunity to meet people face-to-face at in-person events.
• You don't have to go through a competitive application process.

Cons:

• Travelling to conferences and trade shows can get expensive.
• Building relationships can take time. 

7. Small business loans

Another way to find financing is with a small business loan. You can apply for a business loan through your bank, credit union, or online lender.

The Canada Small Business Financing Program (CSBFP) is one resource to consider. This government program tries to make it easier for small businesses to get loans from financial institutions by taking on some of the risks.

Eligibility requires that you operate your small business or startup in Canada and have gross annual revenues of $10 million or less.

The maximum loan amount is $1.15 million. This includes a maximum of $1,000,000 for a term loan and a maximum of $150,000 for a line of credit.

Examples of how you can use a CSBFP loan include:

• Buying a franchise
• Financing a commercial vehicle
• Purchasing hotel or restaurant equipment
• Buying computer or telecommunications software

Lines of credit are available to help fund the day-to-day operating expenses of your business.

Pros:

• You can gain access to a large sum of money.
• Small business loans often have higher limits than personal loans.

Cons:

• You have to pay interest and registration fees.
• There may be restrictions on how you can use the loan. 

8. Small business grants

A grant is like a loan you don't have to pay back. You can think of it more as a monetary gift.

You can search for small business grants from the government, both at the provincial and federal levels. You can also look for private grants from companies or not-for-profit organizations.

Grants typically require an application that collects information about your business and why you need funding. If you receive a grant, there are often follow-up requirements where you report back on how you used the money to support your business goals.

Pros:

• You typically don't have to repay a grant.
• You have to meet the qualification criteria.

Cons:

• It takes time to complete grant applications.
• There might be restrictions on how you can spend the grant money.

9. Bootstrapping

Bootstrapping is a way of building your business without seeking outside funding. If you can afford to self-finance your business through personal savings, credit cards, or personal loans, you don't have to give up any equity.

Once your company gets to a point where you're turning a profit, you can reinvest your earnings into the business for continued growth.

But self-financing a business also comes with risk. If your company isn't successful and you've maxed out your credit cards or taken a personal loan, you're stuck with a pile of debt.

Pros:

• You maintain full ownership.
• You keep all of the profits.

Cons:

• You may experience slow growth due to limited resources.
• You risk going into debt. 

How to prepare for investors

Before you ask for an investment in your business, you need to prepare. After all, when it comes to asking for money, there's a lot of competition. You want to make sure your business stands out.

How you prepare can vary based on which investment option you choose. Here are some core steps you can take to get ready:

1. Create a pitch deck. This is a short presentation that gives investors an overview of your business. What is your product or service? What problem are you solving? How do you plan to make money? Don't forget to edit your pitch deck based on who you're presenting to and how much time you have.

2. Practice your pitch. Once you've created your pitch, practice it. Know it by heart so you can engage with your audience instead of looking at a screen.

3. Study your market. Savvy investors ask tough questions. Conduct a market analysis so you know who your main competitors are and what makes your company different.

4. Know your financials. Before you ask for money, you need to know your financials. What is your revenue model? How long will it take to become profitable? What are your three-year projections?

5. Research potential investors. Before you meet with investors, learn as much as you can about them. What is their background? Have they invested in other companies? Do they seem like a good fit for your business?

6. Prepare for rejection. Unless your first investor pitch is to your mom or dad, there's a good chance it won't result in an investment. Even your parents might decline if you don't have a clear vision. Don't let this get you down. Internalize the feedback, improve, and try again.  

Are you ready to start your search for investors?

Now that you know where to find investors and how to prepare for them, you're ready to get started.

Finding money for your small business isn't easy, but it is possible. And you don't have to stick to one method. Pick the ones that feel right for your business and pursue them. And if you need help organizing your business finances or building custom reports, check out QuickBooks Online solutions.