As an angel investor and venture capitalist, entrepreneurs often ask me the best ways to approach someone for investment. I am a strong believer that the best investments come out of relationships and trust. There is nothing better than a mutually-beneficial deal that propels a business to the next level.
Just like any relationship, we need to go through the steps to see if we are a fit. It’s rare to ask someone to marry you after a first date, and there’s a good chance you are not going to get investment after one meeting.
If you would like for me to consider investing in your company, here are some of the tips to consider:
The First Conversation: Whether you are approaching me through phone, text, or email – make it unique, make it meaningful, make it short and make it hit home. It’s even better if you have someone I know and respect make the introduction.
Go Where the Action Is: Go to conferences, conventions, and tradeshows. I regularly attend events to see what is new, meet with people, and to get leads. Meeting me at an event will likely get you in faster than a phone call or email.
Reach Out to my Other Investments: If you don’t live in Silicon Valley, don’t let that slow you down. Entrepreneurs don’t need to be there to find investors. Find another company I have invested in and get an introduction from them. You can also reach out through my website. There are a lot of ways to be in touch.
The First Meeting
Listen: The best way to start a relationship with a venture capitalist is to listen to our advice and answer our questions directly. We speak to a lot of companies and want to see your company succeed (whether we make an investment or not).
Tight Presentations: Keep your presentation short and hard-hitting; no more than eight or ten slides. Tell me what you are doing, why it is important, why you are going to be successful and what it means to you as a person.
Be prepared for the hard questions: I’m asking the tough ones right away because I want to see how you will deal with adversity. I’m not just investing in your business, I am investing in you. The first question you will be asked is “Who Cares?” so please consider this answer carefully.
Keep it Short: Our first meeting is likely only going to be an hour or less. We should be able to figure out if there is a fit between us within that time and schedule further meetings if required.
What Happens Next
Stay Top of Mind: After the first meeting, I may tell you that “I’ll be in touch,” but sometimes I drop the ball on this. Please figure out a way to follow up and make it easy for me to get back in touch with you. Find a creative way to keep bugging me to get together again.
Get Ready for a Relationship: When I plan to invest in you, I will really get to know you through some unusual interviewing. We’ll get out of the office and go to unusual places. I’ll probably ask you to bring along your husband, wife, partner and really get to know you.
Diverse companies, please: I’m looking for a diverse group of businesses and people to invest in. One of the most important qualities I look for is passion. Are you passionate enough to make this business work? Are you considering diversity while growing your company?
Finding the right investor for your company can be a big job, but rest assured that investors are looking for people like you, too. Taking your time and nurturing a business relationship can not only offer the benefits of funds and advice, but it can also open doors to relationships with further funds.
If you think we could be a fit, reach out to me through my contact page. I love to hear new ideas.