Make the Investors Come to You: What are the Investors Really Looking For? By Chomwa Shikati

This is a question that plagues most entrepreneurs’ minds during the early stages of their Startup when they need to fund their businesses.
The short answer to that is that every investor is different, and each has their own set of criteria that they use to make those decisions. Some may choose to make their decisions purely on the facts; others might be more inclined to factor their feel for the people involved with the Startup. Some may be in the right frame of mind for risk-taking; others might be playing it safe for a while, or waiting to see how out-standing investments play out.
But sometimes even if you feel like you have met all the necessary requirements that have been asked of you, you can still have trouble getting meetings and convincing investors that your company is the next big thing.
That is because there is no shortage of entrepreneurs wanting to be funded. I would not even dare try to count them all, even if it was to prove a point. This is one thing that has made the funding of your ‘ideas’ near impossible.
I guess this is the part where you have to give up on your business idea and move on to something else, right?
Not yet, think about it from the investors’ point of view.
Investors have worked very hard to earn their money. They have spent years and years amassing the money that you so easily want to take from them and they’re still continuing to work hard and taking risks in order to make some more. That is why they also seek for the next ‘big thing’ in the business community.
They don’t wish to lose all their hard earned money on just some ‘big idea’ that you and your mother believe in.
“Well, but mine is the real deal!” You may protest.
Well for an investor, they spend countless of hours listening to thousands of entrepreneurs say the exact same thing.
So unless you have a way to prove otherwise, it will be hard for you to get funding.
So instead of giving up, how about using a different approach that will help you solve your problem and move your business idea forward.
What if you start working on making the investors come to you instead?
Yes, you can do things that will help you attract the eye of an angel investor or a VC, and make your business a more appealing investment.
During a Startup Grind event, when asked how someone can secure a meeting with Gary Vaynerchuk for a chance to win him over so that he can invest in his business, Gary replied:
“The number one way to pitch me and other prominent Angel investors, is to not ever pitch us and have us come to you.”
So how can you do that?
Consider the following ways you can make yourself more attractive for investment.
Start Networking
Try and make a human connection first . Sometimes to attract people to you, you have to reach out and let them know you exist.
Well most entrepreneurs begin reaching out when they have to do the first round of funding. Begin networking before you even have to do that, in order to raise some interest in you and what you are doing.
Seek out the investor-partners that make sense for your business, if you reach out to investors that don’t even match your portfolio you will be wasting your time. And after you find the right investor, reach out to them on social media and begin to create a relationship with them.
Let the investors get to know you as a human being, this will also give you an opportunity to informally pitch your company and still maintain the conversation and a relationship between the two of you.
If they are interested in your or your business they will keep the conversation going and keep an eye out for you. Reach out to a number of them and then let the results come organically.
Networking is usually the number one tip for new entrepreneurs.
Build your idea
The days where investors choose to only fund an idea are long behind us, you need to have a proto type for your idea at the least.
It will be worth the effort for you to leave the idea stage and actually build your product. If you want people to notice you then you have to have results that are worth looking at.
If you are a first-time entrepreneur, it will be much easier to get investments on good terms (particularly from non-institutional investors) if you have shown that your idea can actually work.
Investors want proof that your idea is going to work, and nothing proves this better than having a real product, being used by customers.
Investors hear hundreds of entrepreneurs talk about their ideas, but very few of those ideas yield results. So one of the best ways you can stand out from the crowd is to provide proof that you’re going to hit the ground running — or that you already have.
And if you build your idea that has results which are worth looking at, soon investors will come knocking at your door. So work at improving your business and idea constantly.
Get the traction
There are a lot of great talkers in the world, but at the end of the day, it’s all about the follow through.
If you are to say that you will have one million users by the end of the year, then you need to have a good fraction of that at least already using your products when you utter that statement. Your numbers will speak more than your words.
Demonstrating that people like and are using your product is going to be one of your biggest assets when it comes to attracting investors.
Not only does keeping track of and sharing this information prove that people are interested in your product or service, it also demonstrates your commitment to the growth of your startup.
The more people using and buying your product, the more popular it will become. And as stated earlier investors are on the search for the ‘next big’ thing, they will notice you.
Have a competitive edge
Avoid following the crowd.
To attract the attention of an investor, make sure your product solves a real problem and has a different competitive edge. Too many entrepreneurs simply try to reinvent the wheel, so avoid being one of them.
A competitive edge will make you stand out.
And once you stand out, investors will want to see what you are doing different from your competitors. Chances are they will know about the competitors in your industry, and if they don’t already know, they can find out quickly. They will notice what sets you apart from them and how you will come out on top.
Before they invest in you, they will want evidence that you have some significant advantage that the competition cannot easily overcome. So ensure that you have a competitive edge that will make you outperform your competition.
If you are outperforming your competitors they will reach out.
The goal isn’t to prove that no one else will ever compete with you; again, the reality is that somebody probably will. The goal is to prove that when somebody does try to compete with you, they’ll lose.
Final thoughts…
Investors are just human too. And ultimately, investors are just going with their gut in investing in businesses just as much as you are in creating yours.
So why not create and show them something to believe in?
The approach of making investors come to you instead will make you focus on building a business as your number one priority as it should be. And that is the only way you can build great and big things by focusing on improving them every day.
Try to do something wonderful and you will be looked upon.
What are other ways can a first time entrepreneur use to make investors come to them? Leave a comment and share your thoughts in the section below
Thanks for Reading 🙂

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