The oil and gas industry is one of the largest, fastest-growing and competitive industries in the world. It can be a tough business to manage, especially if you are new to it. Just like with any other business, you might have to find an oil and gas investor to help you run the business.
Bringing in an investor does not always necessarily mean financing. Investors come in with a new set of skills, fresh ideas, and different abilities that you will need in your business. Not to be compared with employees, investors give their best because should the business go down, they have something to lose too.
The Role of the Investor
Bringing in someone into your business might seem scary at first, but it is a smart business move. However, do not just pick any investor for your business.
An oil and gas investor should be someone at least familiar with the trade and understand it well too. Importantly, you need to clearly define the role of an investor that you choose to work with.
The following are examples of questions you need to ask yourself before letting an investor into your business.
- How much you need them involved in the day to day running and management of the business.
- Do they have any right to tell you how to manage their money?
- Will they have any say in the marketing?
- Are you required to report to them and if so, how often should you do this and what report should you be giving them?
Remember, an investor puts their money into the business, and this means that they will need information pertaining to the business, but you can still set the boundaries.
How to Find the Right Investor
When it comes to looking for an investor, your main goal is to nurture a good business relationship with them. Find out what type of companies they have invested in, how long they take to close a business deal, how active they are in the various companies they have invested in, and any other thing that might impress them.
It is always good to do your homework well before meeting your potential investor. Take your time, even if you really need the financial support, do not try to oversell your business and do not assume that the investor will buy into your idea straight away.
There is no specific way of finding an oil and gas investor. Therefore, you can use any legal approach that works for you. Here are some few ways that you can use to find an investor for your company.
This is one of the traditional ways of meeting business prospects that still work to date. Know where players in the oil and gas industry meet up and join their club. If there are business summits in your area, make a point of attending.
Join trade organizations and the chamber of commerce in your State. Remember, it is your role to look for investors so you should not shy away from networking.
Businesspeople who invest in oil and gas are not small-time players, and you need to cast your networking net as far and wide as possible. If you are not able to find one in your area, expand your boundaries.
Do you know anybody who has connections to an oil and gas investor? Then, it is time to take advantage of that relationship and ask them to introduce you to them. Good connections help in business.
Make sure that your connection is trustworthy so that they do not end up sabotaging you. Best introductions are made by successful entrepreneurs who can honestly vouch for you because they are respected, and their opinion is trusted. You can also get introduced by big-time attorneys or accountants.
If you have a business mentor, you can also ask them to introduce you to the right investors. If you do not have any, you might consider getting a business mentor before looking for an investor.
3. Attend Oil and Gas Investor Conferences and Summits
This is one of the ways of introducing yourself as a player in the same field. You want to portray yourself as self-driven, and connecting with the industry moguls in such events is one of the ways of doing so.
Most business summits and conferences are open to all, but the industry players are drawn to them more. You definitely do not want to miss such events if you are looking for an oil and gas investor for your company.
4. Online Investment Platforms
Online platforms give accredited investors the chance to shop for a new business to invest in. This is one of the easiest ways of finding an investor, whether locally or internationally. There are a number of platforms that you can choose from, and you can end up with an individual or a syndicate.
However, never discuss serious business deals online. In as much as you might meet your potential investor online, you need to set up a meeting in person first before proceeding with any further business.
5. Private Financing Firms
There are investment firms that invest with individuals who are seeking financing for their businesses. Some of these companies, like EnRes resources, don’t even require you to have any guarantee before financing your company.
They work with players in the petroleum industry and with over 25 years of experience. You can trust them to approve your finances in less than 30 days.
These are just financers, and they do not require an equity or a share in the company, all they do is to give you the money you need to run your business.
6. Find an Oil and Gas Investor through Equity Firms
Not to be confused with investing companies, equity firms do ask for a share in the company. This is a large company made up of several other individuals who have put their money together to invest in various businesses.
You can choose to work with an equity firm if you do not want to take out a loan from financing companies, family, or friends. Try to find an equity firm that has invested in the oil and gas industry.
Do Not Forget to Document Everything
Once you have found your investor and agreed as to what their role will be in the business, you need to put all this down in writing. An attorney will come in handy to help you draft such important legal documents.
A proper business should be able to set out the responsibilities and boundaries clearly. You need to be careful when it comes to documentation and ensure that you capture everything that pertains to the deal.
Are You the Right Candidate for an Investor?
You are fit to look for an investor if:
- You do not have an urgent need for money
- Your business idea and concept are well established
- You cannot qualify for a loan or any other traditional financing option
- You do not want to have a large loan in your name
- You are ready to give away equity and welcome any other influence that comes together with an investor
Most importantly, you need to have a profitable business plan to lure your potential investors.
What Investors Look For
Choosing the right investor is also very important for your business. Investors, on the other hand, need to know that they will not lose their money. Here are some of the things that investors look for in a business partner.
- You to be the right fit: Your investor needs to know that you are familiar with the industry and know what you are doing. The oil and gas industry is complicated and you need to work with someone who understands it.
- A competitive edge: An investor will want to know that you have studied your competitor and have in place a business strategy that will give you a competitive edge.
- Market size: When you are looking for an investor to finance your business, you already have in mind how much you need from them. Your investor should be able to match that scale. On the other hand, if you target a smaller market, the investor will think you are not ready to play in the big leagues.
- Location and the stage of development: The size of your business and its location say a lot about your business and investors pay attention to such details.
Get your white paper well-detailed and informative to attract worthy potential investors.
Get an Oil and Gas Investor to Boost Your Business
Note that you do not have to get an investor if you are not ready to share your company with everyone. There are entrepreneurs who run a successful business without investors. There are other ways of financing your business without having to share with anybody.
EnRes resources can provide you with the financing you need for your oil and gas company. If you are trying to build your business with limited revenue, you can count on us to get you what you need. You do not need to provide much, just your business plan to get financing from us.
Visit our business and find out more about our financing options. Contact us for more information.