The right financial backing is a critical component to success for Illinois businesses. Investment capital provides the necessary means by which new businesses can be launched. It can also propel existing companies to new levels, driving both customer growth and profits.

However, many businesses do not understand how to choose the right investors. In order to establish a solid financial foundation, small and large companies alike should understand their needs, research potential investors and carefully select those to approach.

Identify your needs

Investors can bring different things to the table. A startup business in the high-tech industry, for example, may be flush with technical expertise but have little to no marketing savvy among its key players. Therefore, looking for an investor that possesses a strong marketing background would be wise. Another company may benefit from having an investor with extensive industry contacts to facilitate product development.

A clear set of search criteria prevents businesspeople from wasting their time and the precious time of potential investors. Areas where companies may lack expertise should direct search criteria. This includes industry knowledge or specific functional expertise such as finance, operations or marketing. The amount of day-to-day involvement companies want from investors is also important to identify.

Do your homework

Once businesses have identified their needs, the next step is to conduct research on potential business development partners. To do this, companies should consider the following:

Friends and family

These people want to support those close to them and financial support of a business venture is one way to do that.

Colleagues and mentors

Investors who know a business owner’s strengths and weaknesses as well as know the industry increases the chance of a successful relationship.

Business associations

These groups expand the list of potential investors but still offer a personal connection.

Online investor lists

This is a great way to find a large number of potential investors in the least amount of time. Clear identification of search criteria will produce the best results.

Companies should also consider investors that have been involved in other successful businesses. This experience yields knowledge that can help other businesses.

Selecting potential partners

After the research is done, the next step is to match companies’ needs to investor lists, weeding out those that do not match. Investors have the potential to support companies’ growth but can also become problems down the road. Securing investors that fit business owners’ needs is therefore critical. People searching for business investors may find it helpful to consult with an experienced business law attorney as well.