Raising equity investment can seem like a game of smoke and mirrors. It isn’t clear exactly what information investors need in order to make a decision to invest. There is so much you could say but it is cutting to the salient points that get investors “on the hook”.
This interactive meetup will explain what investors mean by “traction”, giving you a clear focus for pitching your investment opportunity:
Uncover why “traction” speaks louder than words for investors
Discover the three elements which deliver “traction”
Explore ways in which you can evidence “traction” to quickly hook investors
This interactive meetup will start with presented content to spark a conversation but will include time for you to ask specific questions and to share your experiences too. You will also have the opportunity to hear about resources that make it quicker and easier to raise investment.
Your business needs investment. You are out there networking and pitching like crazy but despite your best efforts investors remain elusive. It’s a familiar story. How do you get investors “on the hook”? The Allbright Academy which supports female entrepreneurs, approached Hatty Fawcett, Founder of Focused For Business and an AllBright Academy Ambassador, to ask her advice for finding, approaching and pitching to investors. Here Hatty shares her top tips.
Always be ready to pitch
Investors can be almost anyone. When I raised investment for my business my investors included customers, suppliers, professional investors and even people who knew me through a shared hobby. The point is, almost anyone can be an investor, so you need to be ready to pitch at any point.
Approach people you know first – people who see firsthand the hard work you are putting into your business. Why not approach friends, family, employers, suppliers to the business and even your customers. They can help you get an investment round started. It’s a lot easier to attract new investors when you already have your first few on board!
Keep it short and sweet
Professional investors – sometimes called Business Angels – tend to be busy people; it can be difficult to find these people and even harder to get their attention. You will need to have a short pitch (sometimes called an “elevator pitch”) that you can use – in either written or spoken form – to quickly give investors an introduction to your business, giving them enough information to pique their interest.
Get an introduction
It is often easier to get a meeting with a business angel if you have a mutual connection to introduce you. If you have someone in mind that you’d like to approach, use your network (and LinkedIn) to try and find someone that can make that introduction. If you’re not sure who you want to approach, another way of getting started is to reach out to your network explaining what you are doing and asking for any suggestions they have as to potential investors.
Have a short prepared summary
A one-page executive summary of the investment opportunity (not of your business plan) is a key tool in your investor toolkit. Written well, this should give investors the information they need to make a decision as to whether this is an opportunity for them. Whatever you do, don’t send your pitch deck. A pitch deck should be presented and isn’t a standalone introduction to your business, save that for when you actually meet the investor.
All investors are individuals – they have their own particular interests, focus and areas of activity. Professional investors (such as business angels, private offices and equity funds) will often not agree to meet you – or perhaps even to talk to you – until they have seen something of the opportunity first.
Arrange a meeting
Don’t expect professional investors to back you after just one conversation. They will need to get to know you and your business. This is best done face-to-face so your initial aim should be to get a meeting or a skype session in the diary.
Follow up every lead
Professional investors are busy people. Don’t assume they will get back to you. You need to take the initiative and keep the conversation alive by following up with them. After every conversation, meeting or pitch, schedule time to follow-up with the people you have spoken to and get their feedback on your investment opportunity. Ask if they have any questions or concerns and – of course – whether they are interested in investing.
Keep the story moving
Professional investors back businesses that are going places, so you need to demonstrate that your business is evolving and growing every day. When following up with a business angel be ready with a juicy piece of new information that demonstrates your business is continuing to grow. This could be news that you have secured a new contract, delivered a key partnership, or the results of a new marketing campaign.
Don’t take “no” personally
Not everyone you talk to will back your business. Get used to hearing the word “no” and moving on. It’s better to know that someone isn’t interested in your opportunity than to waste time talking to them when they have no intention of investing. Move on!
Ask for feedback
Use every interaction as a chance to learn something. Ask everyone you speak to for feedback – even if they are not interested in investing. Their feedback can improve your understanding of how others perceive your business and can help you adapt your positioning, if necessary. Ask for help from the people you speak to too – who do they know who would be interested in this opportunity? Will they introduce you?
Positivity is key
Raising investment is hard work. It can feel relentless and if you have a run of “nos” it can bruise your confidence. Do what it takes to stay positive and keep your energy up – take an afternoon off and do something you love to boost your morale. Then get back to it, refreshed, revitalised and believing good things come to those who persevere!
In many ways, raising investment is a confidence game. Not only will investors want to get to know the founding team and the business plan so that they have confidence in your abilities, but investors will look for external validation too. They may hold back on committing to investing until they see that someone else believes in the idea sufficiently to invest in it. Once you have your first investor – or your cornerstone investment – it becomes easier to raise the remainder of the investment. But how do you find your first investor? It can feel like a catch 22 situation! Hatty Fawcett of Focused For Business asked four founders who have recently raised – or are in the process of raising – investment how they went about it.
Where did you find your investors?
It can be a daunting task, wondering where you will
find investors but these founders were full of practical suggestions.
Kevin Jackson, founder of Blueprints an investment platform for
economic development projects, put it frankly
“All the years of experience and contacts have to be used. You have to go back to everyone. Everyone you’ve ever met – if they aren’t investors they will know someone who is, get that introduction too.”
Shon Alam, founder of Bidweg which offers a new way to exchange foreign currency, also left no stone unturned in his search for investment
tried all the standard stuff you would expect banks, business startup loans,
family, private equity and crowdfunding.”
Marco Scotti, founder of Figaroo which allows members to
book and share VIP tables in the best nightclubs worldwide, talked more
specifically about the channels he used to find investors
used LinkedIn, I approached personal connections and asked for introductions, I
went on financial TV shows, got into the financial newspapers and spoke at lots
All the founders agreed that LinkedIn was key, as were personal introductions. Ian
Dibb, founder of Once
I’ve Gone which ensures family members and
guardians have access to vital documents, insurance policies and files once
their loved ones have passed, put it like this
“A warm introduction really does make things easier, and will normally get you a phone call. It’s then up to you to get a meeting with them.”
How do you opening the conversation with investors?
Personal connections are useful not just in finding
investors but in actually opening the conversation with them too. All the
founders I interviewed had found key investors as a result of an introduction –
Shon and Ian both found Chairman that way too.
Kevin stresses the importance of the phone in making
first contact with investors, and he advises against relying on email.
you are passionate about your product, pick up the phone and do a good pitch.
You will get there. It’s all about people connecting with people!”
Once you’ve made initial contact you will need to supply supporting documentation. Marco recommends
investment ready! That means having a performing deck, a clear “ask” and
valuation and being ready to explain how you will use the funds you raise to
achieve clear goals.”
Shon agrees and suggests you also need a good dose
need all the usual stuff – business plan, video, meeting after meeting. Tugging
your forelock and walking around with a permanent grin on your face, trying to
sound intelligent and trying to get investors to understand the concept, what
makes you different, etc. etc. etc. Investors balk at anything and everything!”
But whilst the process of talking to investor after
investor can try the patience of a saint, Shon urges keeping the faith – you
never know when you will have that magical conversation that changes
everything. For Shon it was recruiting his chairman
“Our Chair has been great at helping to raise funds. I meet him in Costa Coffee and within 30 secs he said “Yep got it.” – and we haven’t looked back.”
How to overcome barriers when talking to investors
There is no doubt that the constant conversations with investors can feel like hardwork. You will need self-belief, persistence and energy.
I asked Marco what he found the hardest about the
process and how he overcame this. His answer was simple and telling
overcome the amount of no. You just have to keep doing that”
Shon talks of having to overcome his shyness and to
put aside being in awe – or afraid – of the people he was speaking to
can get intimidated by these industry leaders, but the goo goo eyes went after
the second round of meets and you just accept it as a normal part of the day
and business. Don’t be frightened, or they will eat you up! Remember they are
Ian talks about the importance of personalising
things where ever possible
decent investors will receive 100’s of approaches each week from the next ‘Big
Thing’, so it’s hard to get their attention. What we have found is that making
the connection request on Linkedin really personal to the investor, will
normally get the investor to connect. Focus
on getting them interested enough to have a phone call or meeting.”
What Kevin found hardest was understanding exactly what investors were looking for. He started by stressing how quickly the business could scale but it turned out investors were more interested in what the business had already achieved. Getting the story right and stressing the facts of what had been achieved to date was the key to overcoming investors’ barriers.
And finally…Top Tips for winning investors
Each of the founders I interviewed had an
interesting – and sometimes surprising – piece of advice to offer for winning
Kevin offered a practical suggestion which led to a
surprising outcome. He instigated a weekly investor telephone get-together
every Friday at 5pm. On one session he asked each investor to pick up the phone
and speak to one contact explaining why they had backed the business and why
they thought it would interest their contact. That exercise resulted in an
investment of £150K that afternoon. As Kevin put it
right pitch to the right person will release the money.”
you clearly present your company, with no ego, just as an excellent investment
vehicle, investors will come to you and not the opposite.”
Shon and Ian both stressed that it isn’t just the
money that is important. As Shon put it
definitely as much about the chemistry as about the money. If you can’t get on with
your investor at this crucial startup phase, then you are in trouble.”
Ian agreed with Shon
have walked away from a couple of investors as we felt that they were not the
right fit for the company. At the time it was hard, but we fully believe that
it’s the right thing for the company in the long run.”
Finding your cornerstone investment – or your lead investor – takes hard work and persistence but making sure you are “investor ready”, reaching out to all your contacts and making personal requests are three key steps that deliver results. Good luck!
************* If you want help in finding investors, building a relationship with them and closing an investment deal then take a look at the no nonsense online masterclass “How to find and win investors”. It provides inspiration and practical step-by-step advice on where to find investors, how to get their attention and offers a proven process for building relationships with investors that deliver investment commitments. Read more about the masterclass