Entrepreneurs: How to approach an investor?

entrepreneurs

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Investors receive every day dozens of projects of entrepreneurs to invest in your start up. You can increase the chances of success if they have "done their homework".

The relationship between a investor and start up o el entrepreneur is similar to an engagement: mutual understanding is important for a trust on which it can establish a fruitful relationship develops.

Meet the Investor

The entrepreneur who send their project to countless investors without first obtaining information about them and selecting has little chance of success. It is similar to what happens with mass mailings curriculum: Are effective little.

The right way is to learn about the inverter and at least be able to answer the following questions:

  • Who is the investor?
  • What are their backgrounds?
  • What is your motivation for investing?
  • What kind of projects invested?
  • What projects has invested?
  • How to add value to projects?
  • What is your exit strategy?

Given this information, possible select investors who are more in line with the ideas of the entrepreneur.

With this selection, must be initiate contact: the first step and easiest is through the network: the most visible investors are active on Twitter, Linkedin or other social networks, and publish a blog. It's easy to make contact via the Internet. But the most effective is getting personal contact looking for someone in or approaching this directly in a seminar or conference. Personally I refrain from attempting to contact in areas that were not too professional or by "bold" Technical (like saying you have a date when it is not true): The result can be counterproductive.

Know thyself

Once contact is established, shall give a brief explanation of the problem solved and the market covering: is called “elevator pitch”: It's not about selling your start up but to get investor interest. Your "elevator pitch" should have the following characteristics:

1.- Duration: Maximum 40 seconds 150 words.

2.- Solution: Describe the problem solved.

3.- Concretion: Do not stay in approaches such as "meet the need of social relationships of human" or talk about mission, Vision and Values, and other "paraphernalia" business. The more specific, best (eg "I get to sell your car at the best price 7 days ").

In case of passing the first filter and have the chance of a next interview, is sound the main issues that will come up and it should be properly prepared:

1.- What is your "burn rate”?: How much money you need to get to breakeven.

2.- What is your level of compromiso personal the project?

3.- Where did the project come?: What are the background.

4.- How are the relationships between entrepreneurs dentro of the start up?

5.- Who are your advice?: Relationships with people who can add value to the project.

6.- Do they have sales?: Do they have real customers who have paid for your product?

7.- Does the project entry barriers that give you a competitive advantage solid?

8.- What is the legal status of the company and the status of its assets?: It is a limited partnership or, There pact partners, who owns the intellectual property, or not there are legal conflicts on the horizon.

Entrepreneurs increase the chances of find investors for their start ups, "Doing homework": during the development of this preparation, you can see the weaknesses of a project to avoid wasting time and money. And with the work done, personal contact Investor remains irreplaceable, despite the help that we can provide network.

 

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