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In attempting to identify potential investors, don’t be frustrated by your lack of direct contacts. First consider who you do know and evaluate their ability to facilitate an introduction. This may include bankers, lawyers, professional advisors, and CEO’s of other companies funded by private equity. A referral to an investor from a source they know and trust is much more likely to result in a meeting or a request for information than an unsolicited proposal.

Also be prepared to invest the time in conducting relevant due diligence on your targeted investor audience. Investors typically have specific investment criteria defined by preferences based on a company’s industry, stage of development, capital required and geographic location. Identifying investors with preferences that match your company profile enhances the probability of generating interest. Also identify other companies in your sector and geographic area that have raised private equity funding and solicit the investors that committed capital to these ventures.

Practical resources for identifying angel finance providers and venture capital investors include local business centers, chambers of commerce, universities and libraries. The internet is also an excellent source for research on individual venture capital firms, finding angel investment clubs and identifying events aimed at connecting investors with entrepreneurs. Paid subscriptions, such as the US-published Pratt’s Guide to Private Equity Sources or hiring a credible capital finder may also be worth the investment. The key is to be resourceful, persistent and fully leverage your contacts and research skills.

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