At various stages of your business, you may pitch venture capitalists, family and friends or other equity investors. There are two components to attracting investors:
- Get their attention.
- Motivate them to learn more about you and your business.
These tips from entrepreneurs who have raised funds and built businesses can help you do both.
Be resourceful
You may need to be resourceful to find the right investors. Jason Coles, founder and CEO of Katika, has discovered a variety of sources for funding his business:
- Business pitching competitions: Coles suggested participating in different business pitching competitions and speaking engagements to otain useful feedback and stir up interest from potential investors.
- Friends and family: Coles had been so focused starting his business while working a full-time job and utilizing funds from his rental investments that he didn’t ask his family to invest. Then he discovered that they were wondering why he hadn’t come to them first.
- Networks and online platforms: Coles suggests considering crowdfunding platforms, like Wefunder. It’s a way to easily share the opportunity for your contacts to invest in your business.
[Read: We Ask: What’s Your Biggest Challenge? Entrepreneurs Say: It’s Financing.]
Every single day, people are putting on a show. To cut through the noise, just be you.
Thomas McGregor, CEO, Central Texas Strings
Be relational
While finding investors for your business is about finances, it’s also about connecting with people who believe in you and your mission.
“When it comes to attracting investors, you shouldn’t just sit down and talk about the money,” advised Thomas McGregor, CEO of Central Texas Strings. Having raised funds for his current and previous businesses and helped colleagues in several sectors secure funding for their businesses, McGregor has found it helpful to shift from an investment pitch to a conversation about the business.
He suggested an idea he borrowed from a recruiting video: Share with a potential investor six qualities about your business. Then ask them which three are most important. This helps you understand the investor’s priorities and helps them better know your business.
Additionally, McGregor said that it’s important to not be all business all the time. “Be personable, be approachable … be humble,” he said. For example, after you pitch at an event, stay after (or go early), but don’t continue to pitch. Instead, ask investors personal questions about their families or their own businesses.
McGregor also explained that experienced investors quickly sense when someone is faking knowledge or confidence. He’s found that if you come in acting like you’re more than you really are, they’ll know it, and they’ll begin to question why you need their money if you’re already doing so well.
“Every single day, people are putting on a show,” McGregor said. “To cut through the noise, just be you.”
Be reputable
As you look at who you want to attract and how, guidance from Chris Cera, CEO of Arcweb Technologies, may also help. Cera raised venture capital for a previous business but chose to bootstrap when launching Arcweb.
He shared advice based on both experiences:
- Give honest answers. “Sometimes you’re in an intimidating situation with an investor panel shouting questions at you like an episode of “Shark Tank”, and it’s tempting to give the answer they want to hear instead of the honest answer,” Cera said. “Just be honest.”
- Build your reputation. “After building a reputation and established business [for Arcweb], we solicited offers for a line of credit from different banks,” explained Cera. “These credit lines can be larger than a seed or A-round investment.”
[Read: 3 Expert Strategies for Attracting Investors]
So, as you get your pitch ready, think about who you are and the qualities of your business. Then, when you connect with a potential investor, as McGregor said, “Just be you.”
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