The Human Component — Picking the Right Investment Firm for Your Project

capital corp merchant banking project funding investorsWe’ve all seen entrepreneurs making presentations on Shark Tank, hoping they’ll convince one of the panelists to like them and their idea and take a chance by providing project funding.

However, the relationship between an entrepreneur and his or her investors is more than the 10-minute pitch shown on air. Both parties will need to work together, keep communication lines open, and agree on long-term goals in order to bring the business idea to fruition so the entrepreneur can realize their dream and the investment firm can recoup its investment.

As an entrepreneur, it is critical not only that you present your idea successfully to your potential investors, but also that you choose the right investment firm for your project financing needs. Here are some factors to keep in mind to ensure a good fit.

Industry Knowledge

You’ll have more success working with an investment firm that understands your industry. They’ll be more likely to grasp the jargon that’s second nature to you and the industry factors you describe in your business plan.

For example, if you’re looking for project funding for a hotel, you’ll want to find a firm that has provided project financing in the hospitality sector. For a real estate project, look for a firm that has invested in real estate projects before.

As you work together more, you may also find that they see potential growth factors you missed because they have a longer-term view of your field.

Transparency

When you are working with an investment firm, you’ll need to be open and honest about what is going on with the business. Your business plan and proposal will require you to follow necessary steps for due diligence — and you must be willing to share what you find with a potential investor when you are looking for project funding. For example, if issues arise as you progress through the start-up phase, your firm will expect you to share them in a timely fashion so no one is blindsided by delays, cost overruns, or zoning issues. They may even have ideas to help solve the issue based on their long experience in corporate finance.

Do keep in mind that you aren’t limited to project funding partners in your own country. International funding of projects is common, and you’ll need to be just as open with a funding partner in another country — and be willing to meet in off hours to accommodate for time zone differences.

You should expect the same level of transparency from them. You’ll want to know who is involved with your project, which person is your primary contact, their track record with similar projects, and ongoing financial information.

That Gut Feeling

Most likely, no matter what a firm looks like on paper, you’ll get a flash of intuition that a particular group is going to be the right fit. Trust your gut — it’s probably what lead you to your business idea in the first place, and it can help ensure that you find the right partners to make it a reality.

When you’re looking for project funding, be sure to start here, with the pros at Capital Corp Merchant Banking.

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