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Looking for project financing ways: direct investments.

A tendency of growth of direct investments is being observed in the world nowadays. It doesn't matter what life stage experiences your company, you can use direct investments for a business development anyway.

Direct investments: yes or no?

The basic plus of direct investments is a fast opportunity to receive necessary means for a project realization. For this purpose can serve not only money but also non-material actives — a consulting help, knowledge and communications of a investor, his authority in business circles.

Direct investments bear also certain obligations for a person who attracts them. First, an investor counts on an income which can help him to return investments back, - annual rate is not below than 25-35 %.

Second, a company awaits some transformations in a management structure – an investor not only supports a company but pretends to participate in development of strategic positions. An investor or an authorized person takes a position of a financial director or another position of top management in most cases.

Third, if a company counts on direct investments it should put its economy to rights and be ready for a legal, financial, technological and marketing monitoring by a potential investor.

An investor decides not to come to a company- Such a thing never happens. It is necessary to be active while you are looking for interested persons. Make sure that all financial streams of your company are transparent, a reporting is in an ideal order and is proved to be true with a help of audit reports, a necessary set of documents is made out  (including a description of involved means to be directed).

It is a very strategically important question how to build mutual relations with an investor – to concede a share of existing proprietors or to choose additional issue of actions. In order to accept such important decisions you should ask for a help of advisers, who work constantly in this sphere and deal with holders of spare capitals very often.

You should consider two groups of direct investors – physical persons (top managers of large companies in particular) and institutions (investment funds and e.t.c). Holding structures can also pay interest to you in order to diversify the investing portfolios.

The most difficult thing is to find out a priority group of investors. The only thing you may count on is the competent marketing research of the branch market. If there is no satisfactory result you should resume your search and analyse other investors with available assets in participation in the project.

Sending an investment offer in a form of summary is quite a good opportunity to make a contact. The purpose is to arouse an interest in a project  and to make an appointment for a subject conversation. If a potential investor shows an interest to invest capital then you discuss a size of investments and periodicity of receipt, power of a investor and his right to leave a project, a control mechanism of use of means.

Search for an investor: Shall we start?

If a company has decided to find a direct investor then you should know how serious its intentions are. Read its business plan of an investment project once again. Only growing business can attract much interest. Be ready to convince an investor in need of additional means in order to raise a company to the next level.

Check the following:

•Highly skilled managers. An investor doesn't buy whole business, that's why he wants to be sure in experts who work in a company, that they are able to organize work - including a project realization which he intends to finance.

• Positive dynamics. An enterprise in a fading stage or a bankruptcy threat will show little interest to an investor.

• Market of industry. Potential investors give preferences to those markets which are in a formation phase and not sated yet as a rule.

A size of a company doesn't matter for attraction of direct investments - it is possible to find those who are willing to input millions of dollars in small firms. But presence of debts, claims of tax departments, judicial claims from third parties may be fatal for an investor.

Direct investments are the most accessible tool of investment for today. If a company sets such a problem, optimal ways of its solving will be found anyway.

18 April 2011
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08 November 2016
#54
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