Finding small business investors can feel like an impossible task.
But you’d be surprised.
I’ve met countless investors over the years. If your small business has potential, people will be lining up ready to throw their money at you. You just have to know where to look for them, as SMB investors can be a special breed (they don’t hang out in the normal spaces).
In this article I’ll show you there’s countless investors out there who regularly work and invest in small business owners like yourself.
Overview of Prominent Investors For Small Businesses
- Dave McClure
- Travis Jamison
- Ajay Royan
- Paul Bassat
- Mike Cannon-Brookes
- Kevin Moore
- Carlos Blanco Vazquez
Dave McClure – Founder of 500 Startups
Dave McClure is a venture capitalist and entrepreneur. He is the co-founder of 500 Startups, a seed accelerator program that has invested in over 2,500 startups.
McClure began his career at Aslan Computing and has worked with tech giants like Microsoft and Intel. You might also recognize him as the marketing director of PayPal. After resigning as CEO of 500 Startups, he founded Practical Venture Capital in 2019.
He’s a Johns Hopkins graduate, plays Ultimate Frisbee for fun, lives on the sunny side of California, and has plenty of investment capital to play with.
- Investment philosophy: customer-focused entrepreneurship, design, usability
- Look to him for: equity and debt investments
Travis Jamison – Founder of Investing.io
Travis Jamison is a seasoned entrepreneur turned investor who ONLY invests in SMBs. Among his latest ventures is Investing.io, co-founded with Richard Patey. This platform serves as a hub for entrepreneur-investors, facilitating discussions on investing, startups, and small businesses.
Travis invests in search funds, as well as co-invests with those getting an SBA loan.
One of Travis’s significant achievements was the sale of AMZtracker, an Amazon product listing enhancement tool, for over $10 million in 2015. His entrepreneurial journey spans over 13 years, encompassing ventures like the Smash Digital SEO agency and his investing company, Smash.vc.
Travis is passionate about the online business realm, with a growing interest in crypto assets. He believes in the potential of those deeply immersed in their niche, emphasizing the importance of comprehensive understanding for success. Investing.io, while not vast, boasts an active community of top-tier entrepreneurs and investors.
- Investment philosophy: growing interest in crypto assets, believes in the potential of those deeply immersed in their niche
- Look to him for: SBA loan investing, equity investment
Ajay Royan – Founder of ClearTax
Ajay Royan is an angel investor and entrepreneur. He is the co-founder of ClearTax, an online tax filing platform in India.
Ajay Royan is the Co-Founder and Managing General Partner of Mithril Capital Management LLC, a firm known for its focus on durable growth investments. Under his leadership, Mithril achieved significant success, notably with Johnson & Johnson acquiring Mithril-backed Auris Health for $5.75 billion.
He collaborates closely with Peter Thiel, ensuring centralized decision-making and maintaining Mithril’s competitive edge. As the Director of Adagio Therapeutics, Inc, Royan has an estimated net worth of $38.61M and owns about 11.2M units of the company’s stock.
- Investment philosophy: long-term stewardship, differentiation, and innovation, often defying Silicon Valley norms
- Look to him for: equity and debt investments, equity investment, SBA loan investing
Paul Bassat – Founder of Square Peg Capital
Paul Bassat is a notable figure in Australia’s business landscape, co-founding Square Peg Capital, a venture capital firm specializing in technology investments. Before this, he co-founded SEEK in 1997, serving as its Joint CEO until 2011.
In addition to his entrepreneurial endeavors, Bassat is a director of Wesfarmers Ltd, a Commissioner of the Australian Football League (AFL), and is associated with organizations like Innovation Australia, the Peter MacCallum Cancer Foundation, Mount Scopus College Foundation, AFL SportsReady, and the P&S Bassat Foundation.
This guy is connected and knows everyone, a marvelous resource for a small business with a solid business plan.
Recognized for his significant contributions, Paul was named a Young Global Leader by the World Economic Forum in 2009. His professional journey began as a lawyer, practicing for six years before transitioning to entrepreneurship.
- Investment philosophy: technology investments and profitable businesses
- Look to him for: equity financing, business loans
Mike Cannon-Brookes – Founder of Atlassian
Mike Cannon-Brookes is the co-founder of Atlassian, an enterprise software company that develops products for software developers, project managers, and content management.
Mike, along with his co-founder Scott Farquhar, started Atlassian in 2002. The company has since grown significantly and is known for products like Jira, Confluence, and Trello.
Mike Cannon-Brookes has a net worth of approximately $15.3 billion, and is ready to invest his own money in small businesses in certain sectors.
- Investment philosophy: renewable energy projects, sustainable energy solutions, ventures that aim to combat climate change.
- Look to him for: equity financing, business loans
Kevin Moore – Founder of Serac Ventures
Kevin Moore is the Founder and Managing Partner of Serac Ventures, a venture capital firm that focuses on early-stage technology companies with diverse leadership. Before Serac, Moore was a Partner at Spur Capital Partners, leading investments in various sectors, including biotech and SaaS.
After obtaining a Bachelor’s in Civil Engineering from Oklahoma State University and an MBA from the University of Central Oklahoma, he ventured to Chicago for career growth.
Moore’s dedication to the investment realm, combined with his passion for supporting startups, has made him a notable figure in the venture capital landscape.
- Investment philosophy: believes in treating each client as an individual, focusing on the whole person and not just their financial picture
- Look to him for: equity financing, focus on fintech and blockchain-enabled technologies
Carlos Blanco Vazquez – Founder of Encomenda Smart Capital
Carlos Blanco Vazquez is a renowned entrepreneur and investor from Barcelona, Spain, with over two decades of experience in the tech sector. Blanco is known for his active participation in business schools and events, and he authored the book ‘The Main Mistakes of Entrepreneurs’.
He has received accolades such as Spain’s Best Business Angel in 2014 and was listed among the 500 most influential people in Spain in 2012 and 2013.
Through his fund, Encomenda Smart Capital, Blanco primarily invests in startups at their seed phase.
Notably, he co-founded First Tuesday, a platform for investors and internet entrepreneurs, and launched Grupo ITnet, a digital gaming business incubator. In 2010, he established Akamon Entertainment, a leading casino and social gaming company in Southern Europe and Latin America, which marked a significant business exit in Spain in 2015. Blanco is also credited for fostering Spain’s startup ecosystem and founded the Conector Startup Accelerator.
- Investment philosophy: he does thorough research on the entrepreneur, the team, the market and how they work together. He believes in an analytical approach, while also trusting his intuition.
- Look to him for: equity financing, focus on gaming and gambling
Types of Investors for Small Businesses
Where should small business owners look to raise capital?
Angel Investors
Angel investors are typically high-net-worth individuals who provide financial support to early stage businesses and entrepreneurs. As an accredited investor, they can inject capital in exchange for equity or debt.
The Angel Capital Association is a resourceful organization that connects angels with startups. As a small business owner, partnering with an angel investor allows you to access their expertise, contacts, and mentorship, which can be valuable for your growth.
Venture Capital Firms
Venture capital (VC) firms are professional investment groups that manage funds dedicated to investing in high-potential, early-stage companies, as well as supporting their development.
VC firms are often associated with riskier investments and expect higher returns. When considering venture capital, it is important to understand the potential impact on your business structure and the potential dilution of control.
Attracting VC investment often requires demonstrating significant growth potential and a strong management team. Check out these VC blogs for more information.
Crowdfunding Investors
Crowdfunding is an alternative financing option that allows small businesses to raise funds from a large number of people.
Crowdfunding platforms, such as Kickstarter or Indiegogo, enable entrepreneurs to seek support from the public in exchange for either equity, rewards, or debt arrangements.
This method of raising capital can be a good option if your business has a strong community following or a product with broad appeal.
Also, crowdfunding can help validate your business idea and build a customer base.
Small Business Investment Company (SBIC)
A Small Business Investment Company (SBIC) is a privately owned investment company that is licensed by the Small Business Administration (SBA). Its primary objective is to provide long-term financing to small businesses.
SBICs primarily target small businesses that demonstrate significant growth potential but might be underserved by traditional lenders. SBICs provide an alternative source of capital, especially for those who might not qualify for traditional bank loans.
What Investment Options Are Available For Small Businesses?
Investment capital comes in many forms. Here are a few.
Equity Financing
Equity financing involves purchasing a share of ownership in the business.
As an investor, this means you’ll provide capital in exchange for a percentage of ownership. Examples of equity financing include investments from venture capitalists and equity crowdfunding.
Venture capitalists typically invest in high-growth startups and often provide not only capital, but also guidance and resources.
Equity crowdfunding, on the other hand, allows multiple investors to fund businesses through online platforms, and it is regulated by the U.S. Securities and Exchange Commission (SEC).
Debt Financing
Debt financing involves lending money to the business with the expectation that it will be paid back with interest.
Options for debt financing include:
- Business loans: Traditional loans from banks or financial institutions can be secured or unsecured and are typically repaid at a fixed interest rate over a set term.
- Line of credit: This provides the business with access to a set amount of funds that can be drawn upon as needed, and the borrower only pays interest on the amount used.
- Invoice factoring: This option involves a business selling its outstanding invoices to a factoring company at a discount, which collects the payments and forwards them to the business.
Convertible Notes
Convertible notes are a hybrid of debt and equity financing. They are a form of short-term loan that can be converted into equity at a later date, typically after a predetermined milestone or at the time of a future financing round.
Convertible notes are often used by early-stage startups, as they can be more appealing to investors than traditional equity or debt financing options.
Grants
Grants provide funding for businesses without requiring repayment or giving up ownership.
Many grants are focused on specific industries, regions, or social causes. Grant applications can be time-consuming and competitive but can provide a valuable source of funding for small businesses.
To find and apply for grants, research and identify opportunities through government agencies, nonprofit organizations, and industry-specific programs.
Conclusion
When you’re trying to attract investors for your small business, it can be an emotional rollercoaster. Excitement, stress, disappointment, exhaustion.
But try to keep your head above water. It’s really just another day at the office.
When you get an opportunity to face investors, be confident in your business’s value and communicate it honestly. That way you’ll be sure to connect with the right investors.
