After spending several months building that great idea of yours and bootstrapping from your personal funds, you’ve finally decided the time is right for approaching an investor and you have been introduced to one. Yippee!!, but do you know somethings about them?
Even if not exactly the same, you could see a pitch for investment as an interview session. There are lots of things you need to know to come out successful, yeah? Well, this post would be covering that and we suggest you read on. Information is power, isn’t it?
- Investors have short attention span.
And I don’t know why, but most investors have a very short attention span when it comes to meeting with founders. Maybe it’s because they listen to pitches (mostly boring) every now and then, or they are just thinking about their money all the time. Who knows? But what we do know is to keep your pitch short, and hitting the bull’s eye. Your pitch to (potential) investors should not be long and boring. Instead, a short one that encompasses all you want them to know which should include your unique proposition, how you are solving a problem and revenue.
- They’re all about the numbers.
Do we really understand that these guys don’t run charity organizations? I guess some people don’t. To be clear, we need to get it that investors are all about the numbers i.e. growth, revenue and returns their investments can yield. While they could genuinely be interested in your product or service, or be interested in impact, that product has to promise them a lot of returns on investment too.
- Your personality determines a lot.
As much as you can, your reputation as a person should precede you. Investors are interested in founders they can work with. By this I mean founders who listen, are open to ideas, believe in team work , are hard working and very trustworthy. Nobody wants to invest in someone who is known for using business money to cover personal expenses, or blowing off cash in the face of plenty. So it’s alright if the investors do a background check on you. That’s if you are not too popular within the space, and they cannot just place a few calls to know about you. Come on man, it’s their money, right?
- They are ‘official’.. You have to be too.
I don’t mean ‘official’ like they wear suits about. I mean it like they want to see documents. Yes, they need to know your business is valid, and (potentially) profitable. Documents like your balance sheet could do justice to this. Simply talking would not convince most enough, they also need to see a proof of concept.
- They might not invest, but…
Okay, so don’t go putting all your hopes on an assumption that meeting with an investor automatically gives them the urge to invest. Trust me, you would be disappointed. Onyeka Akumah, co-founder and CEO of Farmcrowdy once said that they applied to pitch up to 99 times before getting selected for Techstars Atlanta. So dear, you need to just keep an open mind right before you meet a (potential) investor, putting in mind that it could go both ways. They might not invest, but if your idea/business is great, they’ll most likely introduce you to other investors who might be interested.
- Know what you want to use the investment for.
Thing is, from the very first moment you decide you need an investor’s money, you should know what you want to use it for already. Don’t go blabbing when asked what you need their money for, because chances are, they will surely ask. You want to acquire more customers? Build a bigger team? Whatever? Just know it and be able to justify it.
So people, founders, entrepreneurs, there you have it. Things to know before you meet an investor. While there are many other things to know, I believe these ones are pretty important and top of the pack. Let’s go kick some investor’s asses (Errm.. Get their money, I mean).