One of the major components of global finance is international investment, specifically investment geared at growing organizations or to develop specific regions or places globally.
While most of the entrepreneurs or business owners, are trying to present their ideas to people who have some kind of a interest and money.
Many investors, specifically are now become more like banks than investors. What do I mean by this? most of the investors, in the market, have changed their Modus Operandi, and have now more of a banking mentality and methodology for how they invest their money.
While in the past, and maybe in a few uncommon places, you might the Napkin investor a fairy godfather, who comes out of the wizard of oz world, and begins to work on projects, which are looking for investment, and funds millions of dollars to this ideas based on a napkin and a presentation at a dinner or a restaurant.
Those investors who fund napkin ideas, are harder to find than looking for fairy dust at the end of a colorful rainbow, with a bucket of gold. And ridding on a unicorn, chances are that most likely wont happen.
So what will happen, what is suppose to happen. Is that you take your idea and professionally get it ready for an investor, is that process easy? NO.
Can you personally do it with no help? yes.
Does it take longer if you do it yourself ? Yes.
Here why, althought the majority of investments that you see on TV, with shark tank, and other conctestants showing their ideas on youtube, or TV shows to some investor. 99% of all business do not get a chance to be on television.
SO that means their a 1% chance of being that next TV investment ready business. So what happens to the rest of the business ideas, for USA project or globally?
Those project have to present their ideas professionally to Investors, Hedge Funds, Angels, VC, banks and others who are not TV stars. And the process is not glamourous.
This process, can take time due to many factors, usually the investors do not know the entrepreneur. If your one of the lucky guys, who has an uncle with a bucket of gold at the end of the rainbow rich, congrats you have completed monopoly, go ahead and collect your $200 dollars, and remove your self from the rat race, you are not a typical person.
Althought, if you are not. Chances are you fall into the second bucket, which is that you need capital. And have zero connnections. If this is you there is hope but before i speak about the hope, let me talk to you about the roadblocks.
Usually investors, wont invest their money, with people they DO NOT KNOW, think about it. Would you trust millions of dollars into a complete stranger? who you have never met? Probably No.
So here is what you must do to go from a freezing cold (transger) to a friend.
One of these components is known as networking, and socializing, I.E. Mixers, and other elements. But this could take months, years, and maybe if the right person, never attends. Forever.
So how do you shorten the cycle down to 6-12-18 months as the highest potential for you to get funding?
Social media? NO (Linkedin, FB, Angel, Twitter?) and spam investors to death like 10,000 other people?
Or you apply on websites or other places, were chances of obtaining funding is 1-1,000,000 same as winning the lottery?
WEll no.
Here what you can do to gain more realistic chances of you becoming a success in raising capital.
1. You can develop an executive sumarry a one page plan and try to pitch and present this to investors will this work? maybe, some of the draw backs is again (showing it to the right person).
2. How do you know if you spend your time that someone will invest? or that you have the professional skills to convince them to make a decision? You don't.
So here the third option, know that I have exausted you and i think you get the point. Most investors or lenders specifically for international projects. Don't want to deal directly with an entrepreneur? What??? yes, here is why.
Maybe the entrepreneur idea hasnt been vetted properly, or been reviewed. The financials don't make sense, and while most CEO, have someone on STAFF who has an MBA. The large majority of people who don't have an MBA on deck, or a lawyer or a business investor. might not know enough information to propertly vet their ideas against the market against, competitors, market size, prices, teams, etc.
Even thought, if you do have an MBA, it's usually very difficult for you to self evaluate your own idea, without providing strong criticism.
This is one of the reasons, that investors prefer to work with consultant teams, or someone they trust and vetted sources for funding.
1. The consultants are usually professionals who have 10-20 years of experience in their specific fields.
2. Most consultants have Advanced degrees, MBA, JD, PHD, MD, Engineering.
3. Consultants usually have industry connections and understand competition and how teams work.
4. If the consultant was a manager, in finance they will understand most of an investor tough questions, most finance manager work mostly with investors and other ultra high networth people.
5. Consultants understand the legal process, politicial climate and investors preference.
6. A consultant will understand and can advice an entrepreneur, especially if they have started business themselves. What are the best options, for doing business, how to structure the company, and what markets and target to go after to reduce cost, and improve chances for success.
These are just some of the reasons why investors want to work with professional teams.
There many more reasons, in addition to this.
For investments, which are located internationally. What you will see is that most inestors are now focused more on protecting their money, and utilizing, legal tools. Like SPV, Shells, or Insurances.
That is why you have many investors, utilizing (Suretybond Investment, or Insurance wrap, LYods of London), to structure their investment in a way that is protected.
