When it comes to starting a new business or expanding an existing one, there is one thing in common. I am, of course, talking about the need to get funding. For the most part, business leaders will turn to their banks for loans. Many will even offer shares to investors in exchange for some much-needed capital investment.
The thing is; many company bosses assume they can only get investment from within their home country. What they don’t realize is they can (and should) consider investment from foreign investors. So, why does such an approach make good business sense?
It shows your business has potential
I won’t lie to you. Gaining foreign investment for companies is often harder than getting it from domestic investors. Why? The answer is simple: foreign investors are more “picky” about the companies they choose.
They want to minimize their risk as much as possible for the biggest returns. Plus, they may often have access to extra funding for future company expansion. That’s not always the case with domestic investors, especially those with a diverse portfolio.
If a foreign investor wants to invest in your business, it means your firm offers potential!
Foreign investors have no political or religious bias
Investors from other countries usually have no interest in things like a company leader’s stance on politics or religion. Whether people like to admit it or not, that bias exists with domestic investors. All foreign investors care about is putting their money into a company that is likely to give them a safe return.
They wish to expand their own operations on foreign soil
A strategic alliance with a firm in a different country benefits both parties in other ways too. For example, the investor may wish to introduce their domestic brand to international customers. Your company could be the perfect way for them to do just that.
Such a decision is not one they would take lightly. For instance, some of an investor’s employees may need to move to your country to set up a local office. They’d also have to consider things like hiring an investor visa lawyer, leasing accommodation for staff, and so forth.
Their decision to expand their brand overseas is a big one. But, as they are willing to invest in your business, it’s in their interests for both firms to be a success in your country. In short, you are critical to their continued success – and vice-versa!
It gives your business access to their market
Part of your strategic alliance with a foreign investor might involve them introducing their brand to your country. The thing is; it can also work the other way around too! Let’s say that you have an investor from China interested in funding your business expansion plans.
The Far East offers a wealth of potential for Western companies. Even today, the market is still largely untapped. An alliance with a foreign investor can help you tap into new countries and raise your international profile.
When it comes to raising funds for a new or existing business, there is plenty of options available. Garnering overseas investment is an excellent move and can help you to introduce your brand abroad.