How Do I Find Investors for My Business?

There comes a time in the life of every business and business owner when finding an investor becomes necessary.

The reasons that can lead us to this decision vary widely: we may want to sell our business and retire, try something new, or capitalize on our effort, hard work, and dedication — or, on the other hand, we may want to grow and expand, enter new markets, or offer new products and services.

Questions that come up when looking for investors

In any case, finding the right investor to carry out the transaction is key, and it's often the source of many headaches.

Will they pay me a fair price, in line with the company's market valuation? How will they treat my employees, customers, suppliers…? Will they carry on my work properly, or will they put an end to my tradition and legacy?

Many concerns can come up, and it's natural that they do, since building our business and making it a success is no easy task. When you step back or bring in outside capital, it's only logical to want it to happen on the right terms. It's about finding the investor that best fits what we're looking for.

Types of investors

At Deale, as part of our mission to make life easier for SMEs, we're sharing some tips and information to help you solve this puzzle successfully. To do so, you need to know all the options available to you and what each one offers.

A very common and useful way to classify the different types of investors is to distinguish between strategic investors and financial investors.

Here's how it works:

1. Strategic investors: these are other companies, directly or indirectly related to the sector, seeking an investment that is usually long-term and focused on gaining a strategic advantage (growth, synergies, positioning, customer base, distribution channels…)
2. Financial investors: these are investment funds that usually have a shorter investment horizon and whose fundamental premise is return. They place great emphasis on the business plan, can have very different objectives, and don't usually get directly involved in managing the company.

Which investor profile to choose

Once the difference is clear, we can start thinking about which profile best fits what we're looking for and who might be interested in buying or investing in our business.

If we're looking for strategic investors:

1. Our list of candidates can be drawn from competing companies in a related sector or an indirect market, but in a different geographic location.
2. We can also identify companies that might be interested because they cover other stages of the value chain, such as suppliers or customers, and could gain competitive advantages such as economies of scale, synergies, and so on.
3. Large foreign groups that have a connection with our business, especially if we know they're interested in Spain or in some aspect or feature of our company, since expanding into other markets by acquiring companies is very common.

If we're looking for a financial investor profile:

1. We could consider so-called “private equity” firms, either because they've made similar acquisitions or because our company fits the profile of what they're looking for.

With these ideas, you can start to get a sense of who your best candidates would be, and from there you need to study the deal's feasibility.

If you want to learn more about the process of selling your business, you'll find more information here.

At Deale, we're reinventing the process of buying and selling businesses to bring transparency, efficiency, and digitalization to the world of M&A.

We're Europe's first digital M&A platform, so that companies, investors, and advisors can connect easily and close deals much more quickly and efficiently.

We also handle information transparently, so you get a real valuation of your business and can see the different offers and options available to you, because we believe that the more and better information you have, the better the decisions you'll make.

In short, finding the ideal investor has never been easier.