How to Get Investors for Small Business | Methods and Steps

On average, 4.7 million new businesses are started each year in the United States⁽¹⁾. If you’re reading this article, chances are you’re one of them—an entrepreneur with a great product, a great plan, and a passion to see it through.

While small business owners are used to doing a lot of the legwork on their own, there comes a point where you’ll need to secure outside funding in order to take your business to the next level. This article explores the best practices for connecting with potential investors to raise the capital you need to succeed.

We’ll also talk about how Wise Business is a great way for small businesses to handle commerce internationally. Whether it’s funding they received across currencies or sending international payments safely and at low cost, Wise could be a great option.

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Table of contents
6 Ways to Get Investors for Small Business 1. Friends and Family 2. Small Business Loans 3. Accelerators and Incubators 4. Crowdfunding 5. Angel Investors 6. Venture Capital Firms How to prepare for meeting investors Step One: Prepare key financial metrics Step Two: Build a comprehensive business plan Step Three: Do your due diligence Explore the latest funding opportunities for small business

6 Ways to Get Investors for Small Business

Asking for money is never easy. That’s especially true in the business world, where all entrepreneurs are faced with a great deal of competition. Navigating this landscape can be challenging, but with the right approach, you can increase your odds of attracting the capital you need to grow your company.

Fortunately, there are a lot of different avenues you can approach in your search for the right investor. Entrepreneurs can take advantage of venture capital, angel investors, crowdfunding, small business loans, and even the generosity of family and friends. We’ll explore these options in more detail throughout this article.

However, it’s important to note that not all investment opportunities are created equal. Depending on who you are, what you want, and the kind of company you hope to run, you’ll find that some strategies are better suited to your needs than others. Don’t be afraid to cast a wide net. Remember, if the opportunity isn’t right, you can always say no.

Let’s explore the pros and cons of various investment opportunities for small business owners to get a better understanding of what makes the most sense for you.

1. Friends and Family

Some small business owners may look to friends, family, and other personal connections as potential investors. This option isn’t available to everyone, and the amount of capital available may not match what more experienced investors are able to bring to the table. Still, you may be able to leverage your personal connection to get more flexible terms for your loan with lower-than-average interest rates.

Like any other investor, the relationship between the business owner and the lender makes all the difference. A trusted confidante, especially one who’s experienced in your field or industry, can support you through the ups and downs your company experiences in its earliest stages. Of course, it’s also important to keep in mind that the financial obligation of paying back the loan can strain even the strongest relationships. Be sure to set out clear terms from the start to avoid creative clashes and conflict.

Pros:	Cons:
Lower interest rates	Not available to everyone
Greater flexibility	Potential for conflict and relationship strain
Trust and personal connection	Lack of expertise and industry connections

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2. Small Business Loans

Small business owners may also be eligible for Small Business Administration (SBA) loans, which offer competitive interest rates and flexible terms designed to meet the unique needs of a growing business. These loans are partially guaranteed by the U.S. Small Business Administration and issued by participating lenders, usually banks.

As such, you’ll need to meet strict criteria in order to qualify for these loans. Typically, this involves a good credit score, sufficient revenue, and a certain amount of time operating the business. The application process can be lengthy and involved, but the rewards are great for those who see it through.

Pros:	Cons:
Retain full control of your business	Repayment required
Tax benefits available	Strict eligibility requirements
	Risk of default

3. Accelerators and Incubators

Accelerators and incubators are two types of programs designed to help startup businesses thrive. They’ll provide business owners with access to resources, mentorship, and guidance as their business grows.

While accelerators are short-term intensive programs typically lasting 3-6 months, incubators tend to offer more flexible timelines.

Typically, accelerators offer seed funding in exchange for equity ownership, whereas incubators aren’t as likely to provide direct financial support. Still, savvy entrepreneurs can take advantage of networking and mentorship opportunities to connect with potential investors through these programs.

Pros:	Cons:
Funding available	Equity dilution
Access to mentorship and industry networks	Highly competitive and fast-paced environment
Structured programs with clear milestones	One-size-fits-all approach

Learn More: How to Get Pre-Seed Funding

4. Crowdfunding

Popularized by websites like GoFundMe and Kickstarter, crowdfunding campaigns allow business owners to source low-volume investments from a high volume of investors across the world. It’s an incredibly accessible means of securing funding for your investment: no need to worry about credit scores, lengthy application processes, or intense pitch competitions. Anyone can sign up, and anyone can succeed.

Unfortunately, those low barriers to entry also lend themselves to low chances of success. It takes a great deal of time and effort to get your campaign in front of a wide enough audience to see large enough returns to adequately fund your business. Even if you do get in front of lots of potential investors, most of them aren’t likely to have access to large amounts of capital.

Pros:	Cons:
Retain ownership control	Low success rate
Marketing and audience building opportunity	Limited mentorship opportunities
Minimal eligibility requirements	Crowdfunding platforms may charge fees

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Save Time and Money On Overseas Payments With Wise Business

Wise Business can help you save big time on international payments.

Wise is not a bank, but a Money Services Business (MSB) provider and a smart alternative to banks. The Wise Business account is designed with international business in mind, and makes it easy to send, hold, and manage business funds in currencies.

Signing up to Wise Business allows access to BatchTransfer which you can use to pay up to 1000 invoices in one go. This is perfect for small businesses that are managing a global team, saving a ton of time and hassle when making payments.

Some key features of Wise Business include:

• Mid-market rate: Get the mid-market exchange rate with no hidden fees on international transfers

• Global Account: Send money to countries and hold multiple currencies, all in one place. You can also get major currency account details for a one-off fee to receive overseas payments like a local

• Access to BatchTransfer: Pay up to 1000 invoices in one click. Save time, money, and stress when you make 1000 payments in one click with BatchTransfer payments. Access to BatchTransfer is free with a Wise Business account

• Auto-conversions: Don't like the current currency exchange rate? Set your desired rate, and Wise sends the transfer the moment the rate is met

• Free invoicing tool: Generate and send professional invoices

• No minimum balance requirements or monthly fees: US-based businesses can open an account for free. Learn more about fees here

Use Wise Business >>

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5. Angel Investors

Angel investors are high-net-worth individuals who seek out startups and other early-stage businesses with high growth potential. They function in a similar way to venture capital, only in these instances, the so-called “angels” are investing their own money, rather than the capital collected by the firm.

Angel investors usually expect an equity share in the company in exchange for their investment. Many angels are experienced business professionals who can provide founders with access to key resources and industry knowledge for maximum success. Compared to venture capital, angel investors tend to be a bit more flexible in their investment terms, too.

Pros:	Cons:
Access to substantial capital	Equity dilution and loss of ownership
Mentorship and networking opportunities	Potential for creative conflict
No repayment is required if the business fails

6. Venture Capital Firms

Venture capitalists are experienced investors who fund startups and other new companies with high growth potential. It’s a form of private equity financing, meaning that they invest their money and expertise in exchange for equity ownership in these companies.

Venture capital is a great way to secure substantial funding for a small business with high growth potential. Additionally, many firms connect early-stage companies with experienced industry leaders who can provide valuable guidance and advice. It’s important to note that venture capitalists make money as the company becomes profitable, so they’re inclined to push for high growth at a rapid pace—even if it goes against your initial vision for your company. The loss of ownership and creative control isn’t ideal for everyone, and it’s critical to find the right firm to foster success for all.

Pros:	Cons:
Access to substantial capital	Equity dilution
Access to mentorship and industry networking	Loss of ownership and decision-making authority
No repayment is required if the business fails	Pressure to deliver high growth and rapid returns

How to prepare for meeting investors

Make the most of every investment opportunity. Whether you’re pitching your small business to a venture capital firm or a family friend, you’ll want to make sure you come into the meeting prepared. A clear strategy and a detailed plan are crucial to achieve maximum success.

Let’s dive into the best ways to prepare for finding investors.

Step One: Prepare key financial metrics

Investors will expect to see a clear overview of your company’s financials and overall plan for growth. Prepare an engaging and informative presentation demonstrating a clear path to profitability to catch the attention of the investor in question. Here are some of the details they’ll expect to see included:

• Revenue Forecast: Typically, you’ll want to include both short-term (monthly) and long-term (3-5 years) revenue projections. Include market analysis, current revenue, projected growth rate, and other key metrics. Make sure assumptions are realistic and well-explained within the presentation.
• Expenses: Show your projected expenses and how they relate to your revenue. Highlight key metrics such as gross margin, net income, and break-even analysis.
• Cash Flow: Also be sure to present your cash flow projections so investors can get a sense of your expected profitability.
• Industry Benchmarks: Including industry standards as a point of comparison can be a helpful aid for investors looking to get a sense of your overall market position.
• Fundraising Milestones: Explain how much money you’re looking to raise and how you’re planning to use it. Include key milestones to demonstrate your planned path to growth.

Be prepared to answer questions about the financial information included in your pitch. Investors want to see that you have a viable path to success and that you’re well-versed in the overall marketplace.

Step Two: Build a comprehensive business plan

It’s likely that you’ll present your company’s financials to investors as part of a more comprehensive business plan. This presentation should clearly convey your business idea and the market opportunity at hand. Here are some of the key details to include in your presentation:

• Executive Summary: Give an overview of your business. What is the problem you’re solving? What is your unique value proposition?
• Market Analysis: Present your target market. What is the opportunity? What are the key trends in the marketplace? Describe the competition and explain how your business is superior.
• Marketing and Sales Strategy: Describe how you plan to reach that target market. What is your sales strategy? How are you going to acquire and retain customers?
• Business Plan: How is your business going to make revenue and achieve profitability? Include sales forecasts, income statements, and cash flow projections for at least three years.
• Future Roadmap: What are your key milestones? How much funding are you seeking in order to reach them? How do you plan to spend the funds?

Your presentation should be clear and concise—usually around 10 to 20 slides. Tell a compelling story and use visuals, graphics, and charts to convey information in an engaging manner. It’s important to tailor your presentation to your specific audience as well. Experienced investors will want to know that you’ve done your homework on the marketplace and the opportunities at hand.

Step Three: Do your due diligence

After the pitch, any potential investor is going to do their due diligence by investigating your claims, reviewing your finances, and looking into the relevant legal documents.

As a small business owner, you should absolutely do the same before agreeing to work with a potential investor. After all, investors will play a key role in the development of your business for years to come. This relationship can either be to your benefit or your detriment, depending on who you choose to bring on board.

To maximize their chances of success, many small business owners opt to work with investors who are experienced within their field or industry. They’re able to bring a great deal of expertise to the table, which can help you navigate the difficulties you face in the early years of your company.

It’s also worth asking potential investors to connect you with other founders they’ve worked with in the past. Get a sense of their management style and their mentorship capabilities. Were they able to help other companies succeed? Do their goals and objectives line up with your own? These are all important questions to keep in mind before you agree to enter into a business relationship with any investor.

Explore the latest funding opportunities for small business

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• Best banks for startups in 2025
• An entrepreneur’s guide to startup visas
• How 409A Price Impacts Your Startup’s Stock Options

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Sources

1. How Many New Businesses Start Each Year? (2024 Data)