In the United Kingdom, over 2.46 million declare themselves as millionaires [1]. The total UK wealth rises by about £6 trillion each year. Even with Brexit and the falling sterling currency value, the UK still holds 4th place after USA, China & Japan [2]. Meaning just ahead of other wealthy nations, Germany, France and Australia. Largely based on an individual’s wealth and money tied to property value prices. Apparently only about 5% have spending capital available and class themselves as full time investors [3] and the largest amount live in London. About two thirds are self employed and becoming private investors in UK businesses.

Business owners make more money than employees and around 4 times more likely to become millionaires. Banks give less returns on savings and interest rates are rising. Plus the longer turnaround of the property buy to sell market means investors look at other options. Like putting their money in the growing equity opportunities. By and large, businessmen have more acumen in business investing than the general public. Takes one to know one, as they say.

How to find private investors #1

What does a Private Investor Do?

Simply put, a company or individual uses their money to help a business looking for financial assistance. Terms of investment vary according to many factors. Importantly, all seek a good return proposition. From small businesses to large, the many types and kinds of private investors in UK, play a vital funding role. Passive ones take a back seat and just provide finances. Actives require more involvement or a place on the board of directors.

A startup business must predict sales and carries a lot of risks. Unforeseen expenditure always arises so factor in. A higher risk investment requires a higher return.

Passive Versus Active

Many people like the idea of a passive investor. Someone who just provides funding and allows complete control over spending. They prefer longer term investments in lower risk businesses and ride out fluctuating market changes [4]. More of a free reign for you to get on with your venture as generally passive investors are busy professionals who lack involvement time.

An active investor comes with the benefits of access to their contacts and skills. An investor already operating in your market smoothes processes along. They open doors to networks and often give drive and direction abilities. Active investors prefer shorter payback terms and want involvement to ensure a higher return. As a result, they often require more reporting from you on your venture.

Both types want to see a well thought out pitch idea and a comprehensive business plan.

How to Find Private Investors UK

At first, it may seem easier than applying for bank loans or government grants. As stated earlier, the highest number of private investors reside in London, however, the Midlands is growing fast. Funds invested range from £25,000 to £500,000 [5]. LinkedIn is a good source of contact details though some investors do not appreciate random requests for money. Often better to be introduced via a reliable third party. Private investor networks filter out the time wasters and initiate a quicker resource for finding investors.

Drop Studio’s investor database gives an insiders angle to find private investors UK. Over half have LinkedIn profiles and Drop Studio tailor results specifically to your business area.