Approaching Investors Requires Preparation
You may have a business plan that included approaching investors. Asking someone to invest in you or your business is not a frivolous endeavor. The five traits investors deem essential will give you an edge. However, first I suggest that you take some time to search and read up on the topic. I recommend that you check yourself against the five things you must do before approaching any investor.
You have planned, you have done your research, proven that your idea is marketable, and demonstrated that you have the ability or resources to sell your product.
Your start-up funds are dwindling. Family and close friends, maybe even your retirement and other investments have all been used to contribute to your project. You have pushed forward and used that initial funding to develop your business and experienced some initial success. Thereby demonstrating that your idea does solve a problem and it is marketable. Rightfully so, you feel ready and unstoppable. The only thing in your way at this point is a lack of money.
It is time to work on a tight 5-minute presentation that you can use when approaching investors and venture capitalists. Once you develop a solid presentation aimed at investors, how you are perceived, by those listening becomes the difference between success and failure.
Recently, an article in Inc. magazine asked would you back you? Moreover, I loved that they suggested that the reader answer that question using the five traits that investors deem essential in you when you are approaching investors.
5 Traits Investors Deem Essential [Infographic]
Demonstrate 100-percent commitment to the project when approaching investors. That means you are all in. You are so committed that you have made arrangements, done the planning and successfully removed all the distractions from your life. Naturally, there is no room for another job or similar responsibilities that will take time away from your project. If you are not fully committed, why would you expect an investor to give you their money?
Investors deem realism to be important. You must show that you are realistic and understand that you will endure failures along the way. Further, you will also need to take time for yourself, away from the project as well. Make sure your plan is realistic.
Stay and be humble. Show the investor that you are not just a one idea show and that you are steadily improving yourself. This improvement will lay the foundation for further ideas and not leave you stale. These new ideas can include scaling your project in the future; it does not mean that you must come up with an additional plan.
You must be confident in yourself and your business plan when approaching investors. Every intelligent investor will challenge your idea and your critical thinking ability. They will often present an alternative solution, a perceived flaw in your project, or even be aware or yet very familiar with your competition. You must remain confident when challenged, stay faithful to your idea because you believe in your heart that your solution is different from the others. Therefore your product is better. Do not let them second guess your abilities. Stand firm, mentally tough, and show confidence.
The investors will also question whether or not you have the ability to sustain the challenges associated with ensuring you can meet your end of the deal. How you will generate sales, who will be your customers, and if you understand how the size of your proposal. Of course, you will, as most do, want to respond with something to the effect of this market niche generates $3 Billion annually, and if we could grab 1% of that, we would be at $30 Million.
However, what the investors want to know is if you comprehend the amount of work, effort, and time that it will take to earn that 1% of the total. Show them that you have the potential and endurance to walk the path to your vision of success.
These five traits investors deem essential can be the edge you need to gain the funding you need to achieve your dream. Please do not take them lightly.
Additionally, you should test your proposed plan for your meeting against the five traps to avoid the first time you meet an investor.
If you need help or desire some constructive criticism, please do not hesitate to set up an appointment for coaching. The first session is free, and you might only need one appointment to push you to the top of your game.