Securing Funding: How To Get Investors To Say Yes
It’s no secret that for any business owner, getting investors to fund your ventures can be a complicated process. Whether you’re planning to open a new location, invest in new equipment, hire more people or even start an entirely new project, reaching out to investors is one of the easiest ways to get the funding that you need.
In order to make your busy life a little easier, we here at HJR Global have spent some time putting together all of our best tips for getting investors invested in your business.
Approach The Right Investor For Your Business
Too many business owners make the mistake of treating investing like a game of whack-a-mole. They contact any investor in their area that they can find and then prepare a stock presentation that they can give to everyone they meet with little to no time-investment required.
While this low-effort approach to getting funding might appeal to some CEOs, especially those who feel they don’t have enough time to research specific investors and create presentations tailored to those investors’ interests, don’t fall into this trap.
View investing as a two-way relationship. The problem many business owners run into when accumulating funding is that they don’t understand the interests of their investors. Make researching your investors a significant portion of your funding preparation process.
Learn what businesses your investor has targeted in the past. Find out what some of their hobbies are. By figuring out what an investor is interested in, you can tailor your presentation to that investor’s specific interests.
The old adage of “quality, not quantity” is directly applicable to the funding process, and the more time you invest into presenting tailored material to the right people, the more success you’ll see.
Document Your Investors Now To Get More In The Future
Keep track of your investment journey! Document what times you met with specific investors, how you first came into contact with them, and the results of every investment meeting you attend, regardless of the result. Doing so will let you get a bird’s eye view of your funding process.
This is invaluable, as it lets you more easily figure out what types of investors are interested in your work and provides you with valuable data that you can use to target investors more carefully in the future.
Leverage Your Network
Everyone knows someone. By accessing alum and business groups, professional connections, and even friends and family, you’ll be surprised by the number of serious connections you can make. Having a “warm” introduction to investors will always be more preferable than walking into a conference room and giving the funding-equivalent of a cold-call to a bunch of strangers.
So put your network to good use – yes, even if it feels uncomfortable to ask someone you barely know to put in a good word beforehand. Good things rarely come to those not willing to suffer from a modicum of social discomfort.
Create A Short But Powerful Pitch
Generally, if you can’t introduce your product or service to an investor in 25 words or less, your pitch needs work. Investors don’t need to know every detail about your business, life and pet’s favorite squeaky toy from the get-go.
If they have specific questions about projections or product or service details, they’ll ask you. Your job is to give a short and powerful pitch that will let investors know why your product or service is valuable and going overboard can be more damaging to your case than you might think.
Learn To Accept Rejection
It’s important to realize that a rejection isn’t a reflection of the quality of your product or service. Even J.K. Rowling experienced “loads” of rejections before she found a publisher willing to give a chance to Harry Potter, and now Rowling has a net worth of around $1 billion in 2018. Maybe an investor is having a bad day. Maybe they just don’t jive with your business ethics. Or maybe you didn’t pay attention to our first tip in this article and just asked the wrong person.
Whatever the case, it’s important to accept rejections as a part of the funding process, and even more important is to try and learn something from every rejection you receive. Whether or not you manage to get an investor interested in your project, you should walk out of every investment meeting having learned something about yourself or understanding a way to make your next presentation better.
Investing is a marathon, not a sprint, and treating it as such will help you maintain your motivation throughout the project.
Understand The Entire Funding Process
Above all, make sure that you understand the entire process of getting investors for your business. Many business owners initially get their business off the ground, thanks to bootstrapping or relying on money from angel investors (people with too much money who are looking for a profitable way to spend it).
But when it comes the time for young or inexperienced business owners to raise their second round of funding, they’re woefully underprepared. Can you speak the lingo? Do you know the difference between a startup incubator and a startup accelerator? What about the difference between angel investors and venture capitalists? Do you know how to calculate and negotiate equity fairly? What about royalties?
All of these are important aspects of funding that you need to buff up on if you want to be successful.
If you’re having trouble getting adequate funding for your business, or you just don’t quite know where to look next, contact our team here at HJR Global. We specialize in helping companies get the funding they need to reach their full potential. To learn more about what we can do for you, click here.
You can read the previous blog here.