The world is moving at a faster speed each year. So if you want to keep up, you have to follow the advice that the White Queen gave to Alice, “My dear, here we must run as fast as we can, just to stay in place. And if you wish to go anywhere you must run twice as fast as that.” You need to apply this principle to your business.
If you have a great startup idea like perhaps a healthy food delivery, you can’t just take your grandfather’s old truck, your mother’s cookies recipe, and expect a stellar start. You need a good business plan and of course, money. Unless you have some savings or inherited $1 million from a distant cousin, you would need someone—an investor—to provide your initial capital.
Sure thing you have a business plan with a great five-year perspective, a presentation to visualize your goals and everything that a potential investor might ask from you. The only thing left is an investor. So, imagine that you are Galahad, and start your quest for the Holy Grail. Take your networking skills as a lance and your contact base as a shield and set off.
So how do you look for one? Remember that you will be asking for hard-earned money to be invested in your startup. Thus, you need to find someone willing to risk his or her resources and someone ready to share your vision. Here are some steps to help you get started.
Picture your perfect investor
When searching for an investor, you must start with this question, “What exactly do I need?” A person who gives you $100,000 to open a new shop and doesn’t ask any business-related questions? Or an investing partner who will be engaged in the operations of your company?
Probe further. How much money do you need: $10,000, $1 million, $ 100 million? Do you prefer to work with an individual or with an investing company? Does your potential investor have experience in your field or just invests in compelling and promising business ideas whatever they may be? Do you want to see any personal qualities or skills in your investor like straightforwardness or maybe someone with good connections with state authorities?
Such questions will let you visualize the person you are looking for. The more specific you are, the more you can focus on opportunities that will more likely bring results that will meet your expectations.
Localise your investor
Once the first step of your networking quest for an investor is completed, you now know who you need. Next question is where to find such people. Although people, in general, can be found anywhere, you need someone with a particular set of qualities.
The best way to look is to research. Search the web, ask your friends and colleagues, go to your relatives, ask a question in social media—use all the resources in your contact base to find any connection to a person who might become your investor. You may even go to another company from a similar business area—not your competitor, of course—and ask about how they find investments.
So, if a friend tells you that he knows a guy who might be interested in your business idea, ask to be introduced. If your partner says that she has found her investor at a Food & Wine Expo, then think about visiting the next big event of such kind in your area. If you get a comment on Facebook with contacts to an angel group, ask them for a meeting. That’s what networking is.
Think of the value you can offer to your business
Your main value is your business idea or the company you already have. Putting into practice the best concept of networking of being useful to people, you need to bring this value to your potential investor. There are two perspectives on any subject—what you can tell about it and what the other person wants to hear about it. Sometimes we get so deeply immersed in our project or business idea that we keep thinking only about what it can give us or our customers. What your potential investors really want to hear is what THEY will get from it. Keep this in mind while presenting your business plan.
Your next equally-weighted value is yourself. Let’s not forget that we are people and not calculating machines. Your investor might still make a positive decision even if your business plan is not so solid, but he sees potential in you. That means you must show what kind of person you are—goal-oriented, enthusiastic, bursting with ideas, good strategic planner, etc. They must trust you and believe in your potential for them to agree to give their money to you. The investor must know more about you particularly why you are in this business, what kind of experience you have, the number of successful projects you launched, and even your failures especially what you’ve learned from them. Create a short self-presentation and practice it beforehand. You can rehearse it to a friend and ask for feedback.
Stay in touch
Don’t expect to get money during your first meeting with your investor. Majority of people would want to think it over, assess pros and cons, and take their time before making a decision. That doesn’t mean that you need to leave them alone. A simple ‘Thank you’ e-mail is a must if you want to keep the communication doors open. You can also send some documents, comments, and other additions as agreed upon. But don’t be too pushy—keep an equal distance.
Stay professional even if you get rejected because that attitude is highly valued. If people are not interested in your current project, they can still reconsider after you show them your progress, or recommend you to other interested parties.
Potential investors immediately go higher in your networking funnel, so treat them accordingly. Follow up every 3-4 months, inform them of your achievements, and develop a personal connection. You’ll never know when you’ll breakthrough with a person.
After you finish your “Care to Invest?” quest and acquire the money to develop your business idea, be prudent on how you use it. Yes, investment is a must for a good business, but you need to be flexible and open to new ideas while keeping to your business plan. Do these things, and you’ll be off to a great startup!
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