Okay so you have been toiling endlessly at a breakneck speed for what feels like an eternity and your startup is finally up and running. Congratulations! Now what? Well, you will eventually need to expand your operation and for that you will need investors. But how will you secure them? Allow us to help….
• Find a mentor
Finding an investor is an incredibly difficult task and no matter how many times you do it, it’ll still be tough. Your first time will be especially difficult so it is important to have someone who has been through the investment process and is willing to guide you through the same hurdles he/she had to go through. It is also a good idea to network with investors simply for the purpose of learning what they look for when choosing a company to invest in.
• You will fail- a lot
Your first investor pitch probably won’t be successful. Your tenth one might not be either. That doesn’t matter! LeBron James didn’t win his first NBA Championship until his 8th season. That’s 8 years of trying and failing! It won’t take anywhere near that long to get funded but the point remains: success won’t come immediately.
• When the time comes, BE PREPARED
This is going to be a long one, so bear with me here. Before you approach an investor, you need to have a detailed vision for your company. Size, location, number of employees, and number of products shipped a month (if applicable) – and that’s just for starters. You should also be able to explain every single relevant detail of your startup’s structure in the simplest way possible. If you cannot explain your business plan and satisfactorily answer all follow up questions in less than an hour, you need to be more prepared. And don’t forget, you are trying to secure 7 figures in funding- probably not wise to make your pitch in a coffee shop. Find and book a professional conference room; most coworking spaces offer this service.
Make sure you do your homework as well. Have an accurate figure prepared when asked what your company valuation is. Most investors did not reach their position by being naïve and overvaluing your company in a sales pitch is the quickest way to turn an investor off. Furthermore, your business plan should be able to prove there is a demand for your product. Few things impress a potential investor more than a startup that already has potential customer lined up or better yet, is already making sales.
One last thing: you should always be adjusting your pitch. If you have been trying to secure investors for 6 months and have generated little interest, then maybe you should try to change things up a bit and above all else- have fun!