How and Where to Attract Investment for Small and Medium-Sized Businesses in Ukraine

Investments in business enable companies to expand, innovate, increase profits, and successfully manage risks. They are used by both small and medium-sized businesses (SMEs) and startups. In this article, we’ll take a detailed look at issues related to raising additional capital. We offer not just useful information, but systematically organized data. This includes a map of tools, search channel options, and alternatives for procurement. We also cover the legal aspects.

Attracting Investment: Where to Find Investors

To attract investment for business development, you need to prepare a solid business plan and learn how to present it effectively. Commercial organizations, professional firms, and “business angels” prefer partners who are confident in themselves. Once you have a high-quality investment project ready and your goals are clearly defined, you can begin searching for potential investors. Let’s look at a few promising areas.

Online platforms and accelerators

Startup incubators provide funding and valuable information during the launch phase. They help startups respond to investor inquiries in order to attract potential sponsors. In Ukraine, popular platforms include InVenture and Startup Network.

Crowdfunding sites are online platforms where ordinary users raise funds to bring specific ideas to life. You can also find accredited investors there. A popular platform in Ukraine is Spilnokosht.

Online financing services perform the same functions as banks. But getting funds through them is easier and more cost-effective. eDilo is an installment payment service for businesses that helps them grow and scale. It’s a ready-made solution for companies committed to constant progress.

Accelerators are programs that support startups. They provide mentoring and networking opportunities. Some offer expertise, help with pitch decks, and assistance in refining business ideas.

Angels and Venture Capital Funds

Business angels are private investors who invest in early-stage startups and small businesses. They provide financial and mentoring support. You can find business angels through personal connections and networking, by attending industry events and participating in accelerator programs.

Venture capital funds are professional firms. Their business investments are focused on young, promising projects, including high-risk ones. You can find them through accelerators and incubators, at industry events, and through personal connections.

Pitch events and startup meetups

Pitch events are meetings held online or in person. You’ll need to present your idea using a pitch deck.

Startup meetups provide an opportunity to showcase a unique idea and business model. They allow you to stand out from the competition and attract the attention of investors.

Key features and risks of various investment channels:

Building a list of investors tailored to your stage and niche

Identify the stage of your business’s development (pre-seed, seed, Series A, B, C, etc.) and its niche (industry or market). Compile a list of investors by following this plan:

1. First contact — to get to know each other and confirm interest in the topic.
2. Phone call (up to 15 minutes) — to understand the investor’s preferences and briefly present the startup.
3. NDA — agree on the terms for disclosing detailed information.
4. The purpose of the meeting is to present the product.
5. Term sheet — to agree on the key terms for raising capital. The purpose of a term sheet is to obtain an offer from an investor.
6. Closing — final review of documents, receipt of funds.

Agreements, Monitoring, and Reporting

The company grants the right to invest in its assets, and the investor provides capital to generate a profit. Let’s look at the main provisions:

1. Management rights. Founder: day-to-day management, appointing management, forming the board of directors, signing documents, issuing shares. Investor: serving on the board of directors, vetoing decisions, receiving reports, participating in future funding rounds.
2. Control over the use of funds. The investor has the right to approve the budget and major transactions.
3. Reporting. Most investors require transparency. The founder is required to submit periodic financial reports, provide access to information on budget formulation and allocation, and not interfere with audits.

A term sheet is a document that outlines the key financial and legal terms of an investment. If drafted correctly, it strikes a balance between control and flexibility. Key provisions: valuation (of the company before and after the investment), the amount and structure of the invested capital, investor rights, corporate governance principles, and the process for returning funds.

Marketplaces for Small and Medium-Sized Businesses

It makes sense to invest in or buy a business if:

• You have capital but no time to manage it—buy a share for passive investing;
• has management experience in the niche but lacks sufficient capital—joint investment with a partner;
• The goal is to start a business without having to start from scratch—to buy one that’s already up and running;
• There are plans to expand the existing business—either through franchising or by acquiring competitors.

Platforms for SMEs offering investment opportunities: Investy (Ukraine), Business Asset Exchange (BAEX) (EU), IndieMaker (Europe). Be sure to keep an eye out for business-for-sale listings. In addition, use tender announcements as a source of B2B orders. Pay attention to financial metrics (profit, EBITDA), stability, legal aspects (absence of lawsuits), and the company’s reputation.

An Alternative to Equity for Procurement: Buy Now, Pay Later (BNPL B2B)

When a cash flow gap arises, a business faces a serious dilemma. It can either take advantage of buy-now-pay-later (BNPL B2B) financing for purchases or sell some of its assets to attract investment. To avoid diluting capital, it’s more advantageous to choose BNPL B2B. This is an opportunity to quickly close the cash gap.

In a climate of economic instability, entrepreneurs need alternatives due to limited access to traditional credit. One solution is the installment payment plan for businesses offered by the online service eDilo. We invite you to calculate your credit limit online and choose a payment schedule that works for you.

Conclusions

Attracting investment ensures financial stability in the early stages, provides funds for growth, reduces financial risks, and helps strengthen the company’s reputation. Choose secure buy-now-pay-later (BNPL) options to take your business to a whole new level. With our online service, eDilo, business stability is guaranteed at every stage.