Private funders, individual angel investors and private lenders, exist outside the formal grant and development finance system, and they evaluate opportunities differently from a bank or government programme. Understanding what actually persuades them matters more than simply knowing they exist.
These are the fundamentals of finding and approaching private funders effectively.
Understand what a private funder is actually looking for
An angel investor typically wants both a financial return and, often, genuine involvement or interest in the sector, so a pitch that only covers the numbers without conveying real understanding of the business and its market misses part of what they’re evaluating.
A private lender, as opposed to an equity investor, is focused on your ability to repay, similar to a bank but often with more flexibility and a faster decision, in exchange for a correspondingly higher interest rate.
Find private funders through genuine networks
Structured angel investor networks and startup events are a more reliable route than cold outreach, since a warm introduction from someone the funder already trusts carries far more weight than an unsolicited approach.
Industry-specific investor networks, where they exist for your sector, connect you with funders who already understand the space, which shortens the education part of a pitch considerably.
Prepare a credible, specific pitch
A clear explanation of the problem being solved, the market opportunity, and specifically what the funding will be used for and how it generates a return persuades far more than enthusiasm alone. Private funders see many pitches and can tell the difference between genuine preparation and improvisation.
Have your financials and business plan properly prepared before any conversation, since a funder who asks a basic question you can’t answer confidently rarely continues the conversation.
Understand what you’re agreeing to before accepting funding
Equity funding means a genuine, permanent dilution of ownership, and the terms, valuation, control rights, exit expectations, need to be understood fully and ideally reviewed by a legal professional before signing. Confirm your company’s own registration is current with the Companies and Intellectual Property Commission before entering into any funding agreement.
Our guide to SME financing options covers how private funding compares to other routes, so it can be weighed properly rather than pursued simply because it’s available.
Frequently asked questions
What is a private funder looking for beyond a financial return?
Often genuine involvement or interest in the sector, particularly for angel investors, not just the numbers in a pitch.
How is a private lender different from an angel investor?
A private lender focuses on your ability to repay, similar to a bank but with more flexibility, in exchange for a higher interest rate.
What is the best way to find private funders?
Structured angel investor networks and startup events, since a warm introduction carries far more weight than cold outreach.
What makes a pitch to a private funder credible?
A clear, specific explanation of the problem, market opportunity, and exactly how the funding generates a return, backed by prepared financials.
What should be understood before accepting private equity funding?
That it means a genuine, permanent dilution of ownership, with terms that should be reviewed by a legal professional before signing.
Originally published in 2024. Updated September 2026 into more practical guidance on finding and approaching private funders effectively.
