4 Expert Networking Tips to Find Investors for Your New Business

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September 28, 2020 8 min read

The opinions expressed by the entrepreneur’s contributors are their own.

A brilliant product, team, and business model are important starting points for your entrepreneurial journey. But at some point you will have to raise funds to take the next step. Finding the right investors takes time – perhaps more than you thought – and a focused search for the right backer.

Investors are not in short supply, but the investment opportunity that suits you is harder to come by. So you need to make sure that you are in the right places and speaking to the right people. Here are some basic steps to self-prepare you and your business for that golden meeting with tips from investors.

Look in the right places.

There are many digital tools that you can use to find and contact investors in minutes. AngelList is the largest and most popular and is where most of the accredited investors from the US and around the world can be reached. Investors on the platform can be filtered by location, number of investments, industry and more. Thefunded.com is another great resource for business owners to rate funding rounds, investors, and discuss growth strategies. The platform also regularly hosts virtual events where founders can meet potential investors.

Gabe Zichermann, Managing Director of Failosophy, says your local government agency responsible for economic development is an often overlooked tool: “These agencies can provide you with information on debt and equity financing, and even offer programs to secure investments.”

Simultaneously look for events in places like MeetUp and other network sites where you can access a broad cross-section of investor circles – the more options, the better.

When you first talk to investors, make sure you are speaking to the right person. You will save yourself a lot of time and effort if you can find out immediately if someone is a good fit for your company. Look out for people who are investing in your phase, company size, industry or type of mission. But also ask yourself whether they fit your vision for the future of the company. Are you aiming for long-term growth for your company or are you only supporting companies with a quick exit strategy?

Taking these factors into account will confirm whether it is worth contacting the interested party. If you are unsure or can’t know whether an investor will match your startup in this way, ask people who are familiar with them or send the investor a simple message saying, “My company X, is doing Y and Z – are you investing? in this?’

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Use “warm introductions” as often as possible.

If you are new to the startup space and have no direct investor contacts, focus on getting referred by mutual friends or co-workers. Even if you are familiar with your industry, referrals are a particularly effective form of networking. Of course, you need to be sure that the person recommending you is credible. So ask yourself whether you would normally seek advice from them or whether you would involve them in your business.

When you are sure that someone is a good middleman, specify exactly how you would like to be presented to the potential investor. Include what your company is doing, how much you want to increase, and what your business goals are. Investors are inundated with cold pitches, so it is best to be direct while your mutual connection should stand up for you. The warmer the first point of contact, the warmer your relationship becomes – investors always end up looking for endorsement for a potential portfolio company.

Eamonn Carey, general manager at Techstars London and partner at The Fund, recommends being specific when asking a contact for a referral and showing them that you’ve done your homework. Give your contact a specific reason to explain why you would like to be put in touch with a particular investor. Carey suggests the following example: “I want to connect to X because I liked the article you recently wrote about X.” This detail shows that you are active in your sphere and not wasting your connection (or investor’s) time.

To hear Gabe Zichermann and Eamonn Carey talk about how they can network for investors, sign up for a risk-free trial of the SYOB course and attend our live webinar on September 30th. At 3 p.m. ET

Be careful if you fail to pay or close a deal with the people you connect with investors. The recommendation should be genuine and organic – if they ask for money or equity, that’s a red flag that the contact has ulterior motives.

Use the media that best suit your personality.

In the past, networking with investors was just a personal matter. Nowadays, the wide range of digital tools available means that technology is faster, cheaper and more far-reaching to use. That is, how you should align yourself with your personality.

If you’re an extrovert and perform your best in personal scenarios, book a seat at conferences, hackathons, business schools, and community events.

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If you’re more introverted and you’re still in the fundraising game, don’t be afraid to suggest video or phone calls for investor meetings instead. These platforms give you more control and flexibility. Given the current lockdown restrictions, they don’t seem like a common requirement. Carey notes that “the biggest change we’ve seen in the last six months is the extent to which people are comfortable investing after meeting founders at Zoom.”

A big plus with virtual meetings is that you can meet investors early on. Even if you aren’t planning any rounds of funding yet, you can give them a timeline to start and say they should have a preview because they fit so well. Every investor likes to feel like they have exclusive access to a new company.

Keep in mind, however, that the virtual dimension can make encounters less interpersonal, while investors continue to find meeting your team extremely important. So don’t go on stage alone, but also bring a co-founder or relevant executive into the video conference room.

Online tools can also mitigate the blow if the investor is not interested. You haven’t spent as much money and time as you personally would, and you can quickly jump back and take advantage of another opportunity. Zichermann recommends asking the investor to point you in the direction of someone else who would be happy to hear your pitch. Her network is arguably the most valuable, so catching her within easy reach of her Rolodex is a smart move.

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Clean up and update your online presence.

You and your company are in the spotlight even while on the network. Investors are likely to review your website, social media, and company profiles to see if you are worth their time. In return, you need to make sure that your online presence is professional and shows that you are regularly involved in relevant discussions in your niche. You should also be present on whatever platforms your business is likely to be seen on, including social media sites and niche industry forums.

Take some time organizing all of your content, including filtering out historical content that is no longer representative of your business. Make sure your style and formatting are clean and that you are responding to customer interactions. Standardize your brand and messaging across all the platforms you use. Think of your online presence as an extension of your résumé – you want to showcase your winnings and prove that you are better than your competitors. Don’t forget your personal accounts. You should maximize your company exposure as much as possible and make a conscious effort to always talk about your startup.

As with any type of network, the more visibility you have, the better your chances of reaching the right person. Even if a meeting doesn’t seem particularly meaningful, that person can remember you later and facilitate a good match. In the meantime, take advantage of all the tools available to you and make your business the number one talking point.