There are many avenues to connect with business partners and investors today, but picking a potential partner’s or investor’s interest and maintaining that interest long enough to bear fruit, requires some mastery. Before delving into the 10 time-tested ways to get in touch with the right business partner or investor, let’s take a quick look at the difference between these 2 partner types.
Investors vs. Business Partners
Although the terms ‘investors’ and ‘business partners’ are used interchangeably here, they do mean different things. An investor is basically someone who injects venture capital into a business partnership, in the hopes of turning a profit. An investor may not take part in the day-to-day running of the business, in which case he is called a silent partner.
An investor who wishes to maximize his return on investment, by being actively involved in the business, is known as an active partner. Although facing potentially higher returns, the active partner’s liability is also unlimited, as opposed to the silent partner’s liability, which is only limited to the invested capital.
A business partner on the other hand, co-owns a business and is usually valued for bringing complementary skills or expertise into it. A business partner is usually involved with the day-to-day running of the business, and will likely own shares of the company. Both investors and business partners are involved in the profit-sharing of the company’s profits, irrespective of the actual roles they play.
10 Genuine Steps to Attract The Right Business Partner or Investor
1. Have a Detailed Plan Ready
It does not matter if you are in need of a business partner or of angel investors, the first thing you need is a very detailed business plan. It should contain all the information about the business in a very concise way, allowing anybody who reads it to get a proper understanding of the business you are proposing. A shorter version of your business plan should also be available as an executive summary, because investor’s prefer to read them first.
2. Define Specific Roles
Your proposal should state exactly what you have to offer, and what you expect from a partner or investor.
3. Be Open and Discuss Long-term Goals
Being open and discussing the long-term goals of the company allows you to bond with a potential partner or investor. You should happily accept feedback, especially from angel investors and investment companies, because it will help you to grow better.
4. Find A Passionate Person
If you really want your company to succeed, then find a passionate partner or investor. Someone with the drive to succeed. Someone willing to put in extra work or money, just to see the dream come alive. This is the hallmark of every great entrepreneur.
5. Communicate Regularly
Constant communication is very important in any relationship, including romantic and business relationships. Do not go for surprises, or take decisions on your own. You should always discuss things with your partner.
6. Complement your Weaknesses
Nobody knows it all. There will always be somebody who knows or does something better than you. It could be a business partner with a very valuable skill, or an angel investor with profound business knowledge. Don’t be intimidated, grasp the opportunity instead.
7. Be Respectful & Supportive
Being respectful of your partner means not trying to take advantage at every opportunity. We all have our weaknesses, but some people develop more sensitivity to issues concerning their weaknesses. So, if you try to exploit such a weakness, then you may be destroying a potentially great relationship. If you are supportive of any weaknesses on the other hand, then you may have found yourself a great ally.
8. Talk More
As lovely, fast and cheap, as email and other e-communication channels may be, there is simply no substitute to face-to-face communication. There is bound to be more misunderstandings, or misinterpretations with email, because of the lack of tonality, which is usually necessary in clarifying issues. Making a phone- or video-call more often, solves this problem and even deepens the relationship.
9. Trust Your Instincts
Gut instinct can save lives, or simply protect you from harm. If something just seems odd with a potential partner or investor. Or if you just can’t stand the individual for some reason you might not even know, then you should be very careful, and think twice.
10. Put Things in Writing
Trust is great, both there are few things in business that are as important as a written agreement, especially when you are building up a company. It does not matter if the agreement is between you and an angel investor, or if it’s a business partnership formed with investment companies, just put things in writing. It does not only help to define your goals and objectives, it also protects your work and inputs into the business, from any malicious maneuvers.
Attracting venture capital or a business partner with the right skills can be a lifesaver for most startups. With the above time-tested ways, landing a great partner and developing a wonderful business partnership becomes much easier for you.