For a business startup, loans may be difficult to obtain. For example, if your bank has loaned you money in the past but now considers you overextended.

Perhaps the solution is an equity partner or investor. For a profitable business, finding investors is seldom difficult. Whether you’re in the startup phase or are already showing a profit, the real challenge is finding the right investors for your company.

And whether your prospective investors are family members, friends, sophisticated investors, angels (private investors) or venture capitalists, you owe it to your business to find a good fit. Here are seven tips to jump-start your thinking about the type of investor you might be considering:

1. Ask yourself whether, in exchange for financing, you are willing to accept advice and management assistance from the investor. A potential investor who is keenly interested in the operational details of your enterprise might want a larger role in day-to-day management than you’re prepared for.

2. Discover how much reporting the investor will expect from you, and how often. Monthly financial statements are one thing. The expectation of special financial or operating reports that you wouldn’t normally take the time to produce, on the other hand, should give you pause.

3. Identify an outside party with the expertise to review the deal. If you don’t see a source of expertise and good judgment in your own network, consider hiring a consultant to look at the big picture.

4. Research the backgrounds of any investors you are considering to ensure that they are reliable. Engage a reference search service if necessary.

5. Understand what draws the investor to your company and the level of the investor’s commitment. A good return on investment might not be the only reason for his or her interest.

6. Consider whether the investor is knowledgeable about the markets, products and technologies that characterize a business like yours. At times, an investor’s know-how can be more important than capital.

7. Make sure the investor shares your vision for the company.

If you need information in funding your business, give SCORE a call. We can help guide you in the right direction. Call (845) 457-9700 for a free confidential appointment with one of our counselors.