An entrepreneur must know how to attract investors, for which he must first know how to approach one.Because many entrepreneurs need capital to start their businesses.
Sometimes they turn to family and friends and even to the bank. But there are investors who, in addition to capital, provide contacts, experience, and advice, which is not little, especially if you are just starting out and lack commercial experience.
Last week I had the privilege of introducing one of the entrepreneurs whom I usually advise an investor looking for financing.
The meeting was very successful and I believe our minds are on the same page which will surely lead to a long-term investment and partnership.
Why am I so sure of the results? What facilitated the meeting and why do I feel the investor will want to be involved in the business? Simply because the entrepreneur knew how to approach the investor and present her case to attract investment.
How To Approach Investors
The entrepreneur showed passion and vision
Although I had heard the case many times before (and in fact, I am even beginning to help him shape it), I was fascinated by the story the entrepreneur told. The reason is simple – eat, breathe, and sleep for her business.
His passion makes him shine, and he gets excited to talk about it, not just about his business, but the industry as a whole. This makes it incredibly easy to relate to an investor since they now want to hear the story.
He also totally understands your business and your market. He answered each question intelligently, simply because he “knows his metier”.
This is not meant to be arrogant. On the contrary, she was eager to pass on her knowledge and discuss issues in depth.
This way the investor is involved on a deeper level – the more interactive discussion you can generate, the more likely you are to get other meetings and the opportunity to get funding.
It Was Well Prepared, With A Concise And Professional Presentation.
There are those who fail because of PowerPoint, its misuse quickly kills any chance of a deal. A well-thought-out presentation balances the need to convey information with the limited time to do so.
Too many slides, or slides that are too packed with information, are often counterproductive. No more than 20 slides, with precise lists, tables, graphs, and illustrations, will serve to fuel the conversation, which is what you should aim for.
A one-sided presentation where you talk about all the points on all the slides in a linear fashion will most likely be the last time you see your potential investor.
In contrast, we have used our presentation as a point of reference; more as a way to illustrate a point than to prove the point in the first place.
And we succeeded not only because the entrepreneur was both passionate and knowledgeable, but also because the investor wanted to ask questions, which is natural.
We let you skip the order and dictate the flow of the conversation, referring to our presentation when necessary or where we wanted to cover something new. This led to a very interactive discussion.
Do we go slide by slide? No. Will the investor read each one to him? If he is interested, he will surely do it and most likely will find other points that reinforce the information that we present to him.
Presentation is one of the tools you have at your disposal. It is not the only tool as many people seem to believe.
He Sold His Vision And Was Looking For A Long-Term Partner
If you approach an investor with the sole objective of getting a check, you will most likely fail. Most investors want to be partners, there are very few today who want to make an investment without a stake in the development of the business.
You have to be able to “sell” your vision and the reasons why you want the investor to commit to your business. And it’s not just about the money, it’s also about why you think that investor can help you achieve your vision.
Long-delayed aspirations are recovered and brought back to the battlefront, while all those obligations that sap energy and are not transcendent are put aside to focus on rescuing a new life project.
My advice is to approach an investor looking for a long-term partner, someone who is going to be by your side as the business grows, someone who is going to make money with you and thank you. Don’t approach an investor like a bank.
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