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8 Tips on How to Approach Getting Investment
As an entrepreneur you are going to face the experience of sitting down with investors. The experience might be quite overwhelming and might make a huge difference to your business. But regardless of what the end result is, here are some important points to keep in mind. I recently sat down with two investors and here is what I learned:
- Know your audience. Google your investors and get to know their interests, their background and what they studied. Do this in order to break the ice and als to avoid using terminology they are not familiar with. For instance, if you are an online company and you are meeting with someone with no background in the online world, you don’t want to use examples and words your potential investors won’t understand; you want to make the process as transparent as possible.
- You only have 10 seconds to get your first impression. Choose your words wisely, make sure you know what you want to talk about, try to mention your strengths and prepare yourself, even for sudden meetings that may pop up with investors you might not know. Most investors are all looking for common things: your passion, your knowledge, and your seriousness.
- Listen. It’s valuable simply to talk to investors who have a lot of experience. Even if they don’t invest, sitting down with them will often lend you insights you didn’t have previously.
- Know your numbers. Investors want to know how much equity you are willing to give, when will they might get their money back, and how much it costs to set up your project. If you are not a numbers person (like me), train yourself to memorize the relevant metrics by heart, because at the end of the day, investors are looking for profitable investments and your business model should prove that you can make it happen.
- Be honest. If you are asked something and you don’t know the answer, simply confess to that. It’s ok to admit that there are things you don’t know. However, it’s important to show that you are willing to learn and that you know your weaknesses and are working on them.
- Take Notes. In your meeting, investors might say something really important, so be sure to take notes, not only to leave a good impression, but because you really will forget what went on after 20 minutes of leaving the meeting . It is important to remember every remark, question or criticism that was mentioned because these are the things that you will learn from.
- Make sure to leave an impression. Wear professional clothes, have a neat notebook and a strong handshake, but don’t overdo it. I used to think these elements were the most important aspects of making an impression, but the truth is that being prepared is far more important.
- Connect the dots. Each person will give you a totally new perspective on things, on your financial structure, your marketing plan, and so on. Make sure you are documenting what each investor or mentor is advising you. I make something called the “Investor Board” where I write down the most important thing each investor told me. When it is up on a wall, I have chance to see how things are connected and how ideas overlap.
It might take a while before you secure your investment but in the meantime be sure you are learning and enjoying the experience of meeting new people. Relax and remember that this is part of the wonderful entrepreneurial journey we are embarking on.
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