Approaching investors is a sensitive business and you want to make sure that you do it right. Meet Innov would like to help you avoid the mistakes most entrepreneurs make when approaching investors. We would also like to give you some tips for preparing yourself properly.
Starting a new business or implementing innovative ideas is a great adventure, but most people need some financial help from investors. When you are preparing to approach investors, keep these in mind.
Have a clean credit record – If you don’t already have a business or your new business is not yet up and running, investors will look at your personal credit record. So, make sure that you have a good credit score and that any problems or mistakes are sorted out before you approach investors.
Most investors have specific preferences – Investors generally prefer to back businesses that are local so they can meet face-to-face and get to know the people they will be backing. They also have a minimum and maximum deal size. It is of no use applying for an investment that is below their minimum or above their maximum. They also tend to be industry-specific. They stick to industries that they know and understand which helps them see potential or know when a proposal won’t be successful.
Get your business plan ready – Before you approach an investor, set up a proper and thorough business plan. Your plan should be realistic and address any issues you may foresee and it must also give a true and realistic presentation of financials. It also helps if you have some proof that your concept or business will work. For example, good website stats, signed up clients, a working prototype, etc.
Choose the right approach – Most investors are very busy and prefer that they are approached through email. It is also best to be referred to them through a mutual contact rather than using cold calling. It is important to always be professional and honest. Also, make sure that your online profiles and social media platforms are clean and do not create a bad image. They will be looking into you before investing.
The experience (l’experience in French) that investors have with you and the way you present yourself is very important. If your business wants to put in place a new innovative project, investors may be your answer. If you do your homework on potential investors and get all your preparations in place, you stand a much better chance to create interest and successfully get an investor. For more tips, attend local conferences. You will likely also meet potential investors there or get some great contacts that can refer you.