How to Get an Investor to Even Listen to Your Business Idea
In past posts, we’ve covered how to write a business plan and even how to pitch a professional investor such as a venture capitalist. However, there is a missing step between those two activities, which an Ecopreneurist reader wrote in to ask about, and that is: How do you even get an investor to return your call (or email)?
Although this answer is an over-simplification, I’ll recommend to you: Personal Contact.
A few days ago, a venture capitalist told me that he, with the other three partners in his firm, look at 1100 companies a year. These people have a lot of other things to do as well, such as attending board meetings of portfolio companies, conducting detailed due diligence for the few firms they choose to seriously consider for investment, speaking on panels at conferences, etc.
If you send an email to someone who gets hundreds of emails a day, you really need to stand out. Ideally, your subject line would say, “Referral from X.”
Making it Personal
Keep in mind that investors in early-staged companies are investing in people. Before it is really up and running, a Company doesn’t have much value. Ideas are a dime a dozen.
The value is built by executing on a vision and creating a brand, a customer base, a strong team, revenue streams, etc. It is as important to be seen as a trustworthy, capable person as it is to have your business idea be judged as sound.
You’ll have a higher rate of responses from potential investors, if you make use of introductions.
Go After “the Right” Investors
Keep in mind that many investors focus on companies in their geographic area, particularly if they are investing in very early-stage companies. You might have better luck getting meetings with wealthy individuals in your area that in getting a response from a venture capital firm in Boston or Silicon Valley, if you don’t live in those areas.
Investors like to specialize in industries and invest in a business area they understand very well. Be sure to research an investment firm’s or individual’s past investments to be sure there is a good fit with your business.
Build Your Network
What if you don’t know investors (or people who know investors) in your area? Get out there and network. Go to events sponsored by entrepreneurs clubs, investors or your chamber of commerce. If you live near a university, there are likely to be numerous potential networking events on campus. And if you do not find enough events, start your own. Find a speaker, such as a successful local entrepreneur, perhaps paired with his or her early investors. You are likely to attract just the type of network you need to meet.
Even easier–use LinkedIn and other social networking websites. See who knows whom you’d like to meet and ask for an introduction.
Any introduction–no matter how loose the connection—can help. As long as you have a compelling reason why the connection is a potentially great fit and are prepared to graciously accept a “no”, you should ask almost anyone you are acquainted with to make an introduction.
Good news, a study coming out of the Stanford Graduate School of Business says, “Ask and You are Likely to Get Help”.
Powerful One Paragraph
Some investment groups provide submission forms on their website for entrepreneurs who are seeking funding to submit a request for review, and they do look at all of the submissions. In a situation like this, an introduction is not as important, and you can move right to a focus on WHAT to say about your company or idea in just a few words. And, regardless of whether you are using a formal review process or are introduced to a potential investor, you do need a very powerful and succinct description of your business. However, that will have to wait for a post next week.
In the meantime, these posts by fellow Ecopreneurist writers might be helpful: