Are You Reaching Out to Investors the Right Way?
As an entrepreneur seeking backing, it’s sometimes easy to forget that the people with the ability to help and profit with you are people too -- especially when you have so much riding on the outcome.
But here’s the thing:
You could have the most attractive and potentially profitable opportunity going, but still get turned down if you clam up, or forget how to be engaging in conversation.
Want to learn what not to say and do?
Then click here to discover the right way and the wrong way to connect with potential investors for the first time.
Prefer to listen? Click here:
YOU HAVE GREAT CONVERSATIONAL SKILLS -- USE THEM.
Have you ever been out for an evening with friends, just enjoying a night, and you have someone at a bar who comes up to you and is just a little too persistent? Maybe they don't take a hint, maybe they're really pushing their phone number at you, maybe they think you would just be their soulmate, and all you want to do is get away from this person because they're coming on way too hot and heavy. What does this have to do with investing? This is what it can feel like sometimes when I get cold-pitched by start-up owners who are so eager to talk to me and just know in their heart that we are going to be the best fit ever.
When an investor gets cold-pitched like that, it can be overwhelming. I don't know you, you don't know me and the presumptions that we are just going to be a great fit together, that can take me a little off and I want to make sure we're really knowing each other before we get into anything.
So what do you do? There's ways that you can actually approach an investor to make sure that you're coming on not too soft and not too strong. I'm Kelly Keenan Trumpbour, angel investor and venture capitalist. In this episode, I'll talk to you about the do's and dont's of approaching an investor for the first time.
So let's start with the wrong way. I'm not a fan of getting cold-pitched in person, by email or by phone by entrepreneurs who think they're doing me a favor by basically giving me a commercial of their business. Again, there's nothing wrong with being enthusiastic and confident in your business. I love to see that, but that's a little bit different than thinking that it's worth my time and energy to interrupt whatever I was doing and pay attention to you. Again, just use common sense, treat the other person like a human being, and respect their time.
Want to know what will absolutely kill my interest in you? If you try to guilt-trip me into listening to your pitch. Look, I have a lot of companies that want to talk to me, and I love everything they're doing. In fact, one of the hardest parts of my job is saying no. But if we've never met and you're giving me commercial for your business, and you think the way to get my attention is to make me feel bad that I'm not giving you the attention you think you deserve, it's just not going to go anywhere.
So let's talk about the right ways to approach an investor. First, do your research. The easiest way to get an investor to talk to you is to be in the right space with them. If you aren't going to be a match for where they typically invest, you know they're not going to give you money. That's not that they wouldn't be interested in you as a person or what you're doing. If you want to just use them for networking, that's another story, but when you go ahead and pitch somebody, make sure that they have a history of investing in companies that are like yours, in the same industry, in the same space. If they don't, it's a real long shot that you're going to be the right fit for them.
Another great tip, treat the investor like a human being and not a walking piggy bank. This is important because it just frankly works. I can't tell you how many times I followed up with entrepreneurs because our conversation started with something totally different than their company, or whether or not I'd invest in them. They would come up to me and talk about a mutual interest, or someone we knew in common, or they like something about my work. We would just start talking like normal people, and not necessarily talking to each other like we were on the verge of a long-term business relationship.
Super stealth tactic: Get the investor to invite you to talk more about your company and don't just pitch them. How do you do that? Find places of mutual interest, like I said before, but just get to know them as a person and show who you really beyond the business, beyond the entrepreneur. Usually investors get interested because they want to know what's happening in the spaces they invest in. If they figure out that you represent something that's new and happening in that space, they're going to want to pick your brain and maybe even invite you to pitch so they can learn about what you're doing.
What happens if the investor you're talking to just doesn't invite you to share more? You can always ask them for additional leads. This doesn't have to be leads for direct investment, it could just be, "Do you know of anyone else I should talk to?" That could be in a general sense for networking purposes, for reaching out, for finding other people in your space. Let them give you leads and just see what happens.
What's important here is just to remember that even though it may feel so urgent and necessary that you get the funds and help that you hope an investor will give you, don't let that overwhelm you. When you're trying to meet investors, lead as a human being, lead as someone who's just interesting to talk to, see where that takes you. It's a much better route than going for a cold-pitch and a hard commercial.
Don't make the mistake of expecting investors to give their time or advice freely, but if you want some more help with how to network with investors, head on over to SeeJaneInvest.com/UltimateNetworkingGuide or click the link and download your free copy.
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Until next week
Miss last week’s post? Check it out here: 8 Things Every Investor Looks For In a Startup Business.