Five Tips to Become an Investor Magnet

This article was written by Jennifer Pellet of Entrepreneur.com

It can take years of hard work and good fortune to find an investor who will help take your business to the next level. But what if you didn't have to wait? What if you didn't have to seek out investors and instead they came to you?

That is not a fantasy -- it actually happens every day. Private equity groups and venture capitals are always on the lookout for great companies that have the potential to become great investments. In fact, most investors don't sit around waiting for entrepreneurs to call and ask for money. Instead, they actively hunt for companies that are already well-positioned for strong growth.

Bruce Evans, managing partner at Summit Partners in Boston, says there are certain fundamentals that help companies attract investors. Summit Partners' 80 or so investment professionals manage nearly $9 billion and have invested in more than 280 companies since 1984. Summit makes both VC-style investments and later-stage private equity investments. In either case, Evans says, good fundamentals can make him pick up the phone and dial your number.

That is exactly what happened to Adam Bold, 42, founder and CEO of The Mutual Fund Store Inc. in Overland Park, Kan. "I wasn't looking for any money," says Bold. In fact, when Summit Partners gave him a call in early 2006, he had only recently bought out a prior VC investor and was enjoying the benefits of owning the company himself.

The Mutual Fund Store provides 401(k) advice and services for individuals and companies, with locations in 50 cities. The company is not only profitable, but it also generates strong cash flow. Bold had it pretty good and could have stayed the course alone. So why did he take on another financial partner?

It was about the opportunity for growth, he says, both personal and professional. "My company had gotten larger than any [company] I'd ever run before," he says. "I wanted to grow this thing and make it as big as I could. Instead of [using] trial and error, I'm getting [the investor's] experience."

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