RACO Investment founder Randall Castillo Ortega discusses finding financial backers for a startup

Every day, young and entrepreneurial companies propose increasingly interesting projects, many of which are quite promising. The main problem that novice entrepreneurs face is the lack of funds for its implementation. One of the ways to get financial help for business development is to find a sponsor. Randall Castillo Ortega, the founder of SME backer RACO Investment, discusses how.

It is clear that for an entrepreneur, the main objective of this cooperation is to obtain seed capital for business development. Not everyone knows that along with initial capital, the entrepreneur receives certain obligations that, of course, must be fulfilled. In most cases, sponsoring companies expect a return, usually in the form of a percentage of profits. In the case of existing businesses, the sponsor can request a part of the shares in exchange for funds. That is why they are so selective when choosing a business project.

The sponsor can be both an individual person and a company. Explains Castillo, “The first problem newcomers face is the lack of information about who an investor can be and where to find a sponsor for the business. One of the most common ways is to seek the help of organizations looking for investors for small and medium-sized companies at a professional level.” These are investment funds, technology parks or business incubators. At present, several business events dedicated to certain industries are constantly held. They can be exhibitions, conferences or seminars. This is where potential investors often meet.

It is easy to find many sites on the Internet and social networks business issues. There you can familiarize the audience with your business proposals, find a sponsor or, on the contrary, offer sponsorship services, as well as find business partners. To work together, you need to choose from the full list of investors exactly those who participate in a specific profile, and thoroughly study each one’s portfolio. It happens that the sponsorship to start or develop a business is provided by family members or acquaintances. However, in many cases, this is achievable when it comes to a small sum.

It is clear that the desire alone to receive funds is not enough. If you need a sponsor for a business, you should be interested. That’s why a competent business plan is important, in which a potential sponsor will be able to see not only the idea, but the numbers, as well as the prospects for development.

“As a general rule,” explains Castillo, “entrepreneurs who are already successful and well versed in business act as sponsors. The prospects must not, therefore, be far-reaching. It is necessary to use actual figures for the estimation and financial plan. To get a clear idea of this problem, you can study the work of several of these companies or seek the help of a professional economist.”

A business plan is half the battle. It is now necessary for the potential sponsor to agree to take a look at it. To do this, it is necessary to develop a commercial offer that may interest you. A concise letter should reflect the main points of the business plan. It’s good that it doesn’t take up more than one sheet of printed text.

Technology has developed so greatly that a great deal of the work can be conducted over the Internet. However, it’s still more useful to meet with a potential sponsor in person. Before the meeting, you should prepare a competent and interesting presentation. It is best for business owners to carry with them all the documents that prove that this is the right business to invest in. The outcome of the whole process often depends on a personal meeting.

The difference between forums and other Internet resources is the presence of comments. Appreciative entrepreneurs who have already received financial support share the contacts of their benefactors. With this data, those who need assistance can apply directly to the selected candidate.

Recent Posts