How to Connect to Investors
“Although it’s easy to forget sometimes, a share is not a lottery ticket… it’s part-owner business,” – Peter Lynch
Eventually, businesses that wish to scale, to grow, to franchise, or to internationalize must attain investment from the entrepreneur, a friend, family, bank loans, Angel Groups, Venture Capitalist, and more. To connect with investors, entrepreneurs and their teams must attend events and network themselves, have the resources necessary to impress investors, and prepare business documents to close the deal.
Using the internet is a great way to find Angel Groups, Venture Capitalists, Incubators, Accelerators, and more. A quick Google search can provide insight to every local investment chapter around you, and many publish their rules, regulations, event schedules, and more. The Angel Capital Association is another great tool for find Angel Investment groups in which the company has a list online detailing every Angel Group in a geographic area.
Entrepreneurs in need of financing must get out there, attend events, setup meeting with strangers, enlist their friends and family to increase their contacts and more. In the words of Maya Angelou, “nothing will work unless you do.” By attending events and meeting people in the world of investment, entrepreneurs can get their name and brand out in front of people who otherwise wouldn’t know any better.
We suggest attending as many events as possible when looking for investment, relationships are key to securing deals. The more investors trust you, the more they will be willing to invest in you and your business.
Resources are a key tool for entrepreneurs to utilize when speaking to and pitching banks, investors, and more. Resources used when speaking one-on-one or in small groups could be
Business Cards are a great way to provide your name and contact information, and business cards ensure that your name won’t simply be forgotten when the meeting ends
Tear sheets are a great way to provide key details and aspects about a business without requiring a lengthy read. Tear sheets are most often a one-page, two-sided document with paragraphs and infographics detailing the business purpose and its practices. To read our tear sheet, go here.
Like a tear sheet, flyers are one-page documents that provide a detailed, concise display of product or service information including specifications and cost. Flyers are utilized when trying to make business connections and when trying to improve sales.
Resources utilized when pitching a group of investors to attain financing could be the items listed above and:
A business plan is a lengthy document that details all aspects of the business from key employees and executives, to product specifications, financials, milestones, projections and more. Business plans are a great way to show investors that you have a plan and know how you are going to reach your goals.
A pitch deck is normally a PowerPoint slide set that details all the information in a business plan without the lengthiness and the complicated jargon. Pitch decks are a great way to entice the creative mind and show off your skills and assets using data and graphics such as pictures, tables, and charts.
When speaking to investors, it is crucial for you to have an ideal agreement laid out and ready for negotiations. If you don’t have terms that you’re okay with, it is possible that investors may bully you into accepting deals at a much higher cost to you than you want.
Closing the Deal
More often than not, closing the deal with potential investors can seem like a daunting experience that might scare even the bravest of entrepreneurs. The what-ifs may start boggling down, eroding the very confidence you have for your products or services. Sound familiar?
Here are some things to consider before closing the deal:
- Have you found the right prospect?
Having the right partner in a business venture is crucial. To determine if an investor is the best option for you, consider their goals and vision and ensure this aligns with yours.
- Reaching out to prospects
Once you have found an ideal investor, reach out to them and make connections. Showcase your talents through phone conversations, online applications, and in-person meetings to really win over an investor.
- Waiting out the decision
Once you have met with and pitched an investor, the waiting process begins. Understand that all great things take time, an investment in your business could take days, weeks, and sometimes months to facilitate. A great way to ensure the investment process goes your way is to keep constant communication and show genuine interest and gratitude for the opportunity.
Like all endeavors, its takes grit to make the imagined a reality; living in a time where resources are available with the click of a button, persistence is the key to making investment happen.