WHAT IS THE BEST, EASIEST, TACTICAL AND LESS COSTLY TO FIND INVESTORS 4 BUSINESS?

Attracting investors is one of the hardest things to do in business. Success atracts success. What you need more than anything is a complete business plan that shows the realistic potential for growth and a profit and loss statement that shows you are meeting your stated goals.

Next, lets back up here. The first thing an investor is going to see is that your time is too divided. Starting a new business takes insane amounts of energy, time, and overall dedication. Trying to start three at one time you might as well shoot yourself in the foot. The best thing for you to do is pick one of the above to focus on. Personally, I like the bake shop the best because it is a real business and it is franchiseable if it is done right.

When an investor looks at your business they will look at potential for growth and what assets are available in case of liquidation to cover their losses. In all three of your business ideas there is very little in the way of either.
I understand the other two ideas are “real”, but an investor is going to want to see cashflow, transperancy of books, real potential, and will want to have a member of his team on your board of directors for oversight. Investors will want to see a well planned out business plan that shows them how they can realistically expect a 20% to 30% equity position and return (minimum) on their investment.

In order to attract an investor you will probably need to incorporate. A corporation is its own identity, IE an unnatural person. It can own property, be sued, and sue. You don’t own a corporation, you work for one, even if you own 51%+ of the stock. A “C” corp is the most common and most likely the best choice for you. Most businesses incorporate in Nevada or Delaware, and there are pluses and minuses to incorporating there, but that is more research for you at a later time. Incorporating allows you some levels of protection from personally being sued and it allows you to divide up ownership with investors cleanly by selling stock.

At this point stock is free to you. You, as President, treasurer, and secretary authorize X number of shares at par value (usally 50,000,000 shares at .001 cent each). Then you sell it to an investor based on some calculation. Wihtout using any multipliers a stock would be worth profit divided by the number of shares. So $250,000 in profit divided by 50,000,000 is a value of $.005 or half a cent per share. You can sell the stock for this amount as a true value, you can discount it as an incentive, or you can raise the price if you have a strong enough argument to show that the cashflow will be significantly higher in the following quarters or years. In order to attract investors you will need to show huge dollar signs and it has to be realistic. This can be shown by eventually (<5 years) taking the company public.

Don’t be worried that you are selling off millions and millions of shares. If you can go public at $5 in a few years and you still have 10,000,000 shares in your name…hmm…that’s still $50,000,000. Not bad. Now you can go tinker with inventions and do it right.

One of the reasons going public is a good strategy is that the investor will need a clear exit strategy before they invest. If they have a ton of private stock that no one wants it isn’t worth anything to them. They need to be able to liquidate eventually. The business can buy back the shares as well, but it is going to have to have the cashflow to do it.

Don’t even waste time trying a bank. The old saying “A bank will only lend money when you don’t need it” has certainly been true for me. Personally I would stay away from family because when things dont work out it messes up more than financial situations. For you to find an investor on your own would be incredibly lucky at this stage. Maybe you just happen to get paired up with someone on the golf course that has the same business intrests as you and he is sitting on a lot of cash. That is one way. Probably the most realistic way is to find a company in your area that puts together meetings for investors where you can come pitch your idea. If the investors bite, then they get a finders fee – usually around 10%. They may also ask for stock and they may also ask for a few thousand dollars to cover the meetings, mailings, filings, etc. All of this is negotiable. The more they are willing to put out the more the chances they can and will actually do something for you.

These companies may be interested in doing a private placement, which is a step below going public. Be careful because there are a lot of unscrupulous people out there that will promise you the world and will continue to take your money until you are done. You have to find heavy hitters that are for real. Look for local companies that raise capital on your Yahoo search engine.

Good Luck!