Sir, I am a sole proprietor of a firm. Do VC, angel investors only invest in private limited or limited companies and not in sole proprietorship firms? I wish to expand my business but not knowing how to approach VC and angel investors? I do not have a mentor who can suggest funding of start-ups. Please guide. Thanks

Ans: To become an investor into start-ups, you first need to have investible surplus that you can afford to lose without losing any sleep! It is a high risk activity involving patient capital; further it is illiquid and returns are uncertain. It is essential to understand that. Some investors also like to play an active role in some of the start-ups they invest in.
How do they find businesses to invest in? By being close to the places which start-ups frequent. It could be incubators, accelerators, entrepreneur facilitation bodies, associations etc. Many investors become part of angel networks, syndicates etc to understand how other experienced investors evaluate and invest in start-ups. It would be good for you to speak to a couple of experienced investors and financial advisors before you embark on this journey

Ans: Sole proprietorship, by its very definition, implies a single owner. You will need to convert it into a private limited company to attract other shareholders/ investors. To become investment-ready is a different ball game. It would be good for you to attend local entrepreneur association meets like TiE or become part of an incubator.

Ans: Dear Mr. Sujeet,

Your story is is th story of thousands of other entrepreneurs . Running Business with limited fund is risky. So better return to job to mitigate your financial burden. .

Ans: It is difficult to answer such generic questions. 99+% entrepreneurs/ start-ups don't/can't raise funding for various reasons. You may want to refine your idea/ business model by being part of a well-known incubator where you can get specific inputs plus mentoring too.