5 Types of Investors

By September 16, 2020December 17th, 2020Blog
type of investor for startup

To put it simply, investors have the potential to serve as the lifeblood of a startup. The right investor can help catapult a startup from its humble beginnings to its ultimate success. However, choosing the wrong type of investor for your individual startup could do more harm than good in the long run. Keep reading to check out different types of investors and how each could potentially benefit your company.

1. Angel Investors

Angel investors are individuals. These investors have an earned income that exceeds $200,000 annually or have a net worth that exceeds $1 million. They can be found across industry lines, but usually work with entrepreneurs who are somewhere between their first time financing and a venture capital effort.

2. Peer-to-Peer Lenders

Peer-to-peer lenders can be individuals or groups. They help fund small businesses. If you want to apply for peer-to-peer lending, you need to apply with companies who are specialized in this type of financing. Lenders work with these companies to find businesses they want to finance.

3. Personal Investors

Businesses can turn to their family, friends, and networks for their first investments. Talk to an expert if you have people eager to help; only a certain amount of people can invest in startups and you’ll need to provide thorough documentation.

4. Banks

The good old bank! Banks are a classic source for business loans. Before your application is approved, you will need to produce proof of a revenue stream or collateral. Because of this, banks are usually a better option for established businesses, but you don’t need to be a mogul to get financing.

5. Venture Capitalists

Venture capitalists are private equity investors that provide capital to companies exhibiting high growth potential in exchange for an equity stake. They usually invest sizable chunks of money, and are typically used once a business demonstrates potential for significant revenue.

Connect with Investors and Receive Funding Through Larta Institute!

At Larta Institute, we help startups connect with investors and receive funding to further grow their business, as well as assist businesses in securing and utilizing funds for commercialization success. Our team pursues funding via TABA and SBIR grants from government agencies including NIH, NSF, NOAA, DOE and USDA. To learn more about our proven system and how we can help your startup, contact us today!