Small businesses power local economies, and many need capital that banks will not provide. That creates opportunities for individual investors, and real risks.
Common strategies
- Angel investing: early money for a young business, usually for equity.
- Private lending: lending money for a set return, often secured.
- Revenue-based financing: repayment as a share of sales, without giving up equity.
- Acquisition and buyouts: buying or partnering to buy an established business.
- Real estate alongside a business: owning the property an operator uses.
What to look at
- Cash flow and whether the numbers are verified
- The owner’s track record and how much they invest themselves
- How the business makes money and how repeatable it is
- Your exit: how and when you get your money back
Understand the risks
Small businesses can fail, and investments can be hard to sell. Never invest money you cannot afford to lose, spread your risk, and get professional advice. Rules on who can invest and how vary by country.
Getting started
Define your strategy, cheque size and industries, then look for deals that fit. A profile on our investor directory lets businesses that match your criteria come to you.
Are you an investor?
Create a free profile and get introduced to small businesses that match your criteria.
This article is general education, not financial, legal or tax advice. Talk to a qualified accountant and lawyer before you buy, sell or invest.