What is one thing first-time founders should remember when they’re trying to get the interest of a potential investor? Why is this so important to remember?
These answers are provided by Young Entrepreneur Council (YEC), an invite-only organization comprised of the world’s most successful young entrepreneurs. YEC members represent nearly every industry, generate billions of dollars in revenue each year and have created tens of thousands of jobs. Learn more at yec.co.
1. Remember You’re Building a Relationship
It’s all about the relationship with investors. Yes, you need to be prepared enough to pitch investors when you finally meet with them, but you don’t need to pitch them all the time. Speak with them, not at them. Be organized and polite. Ask questions and listen. Answer their questions and build a business rapport with them. – Thomas Griffin, OptinMonster
2. Underline the Problem You’re Solving
If you have 10 minutes with a potential first investor, make it clear what the problem or pain point is that your business has the answer for. If the investor understands the value proposition of your business and how widely-felt the underlying problem is, they’re more likely to see the upside potential of your business. At the end, you must underline how your solution addresses the issue. – Tyler Gallagher, Regal Assets
3. Be Clear and Concise
Be concise and get to the point. Make sure you are very clear about your value proposition, your product or service, to the point where you can flow easily. Investors will easily notice if you and your team are passionate about the idea and the project. In this digital age, being consumers of information — often unnecessary — constantly, it’s better to keep it short. – Kevin Leyes, Leyes Media
4. Have a Tight, Compelling Elevator Pitch
Investors are continually bombarded and don’t have the time, bandwidth or desire to do a deep dive into your business unless you can quickly captivate them with truly something compelling. To capture the interest of investors, first-time founders must develop a tight elevator pitch that is powerful enough to leave investors wanting to learn more. – Adam Mendler, The Veloz Group
5. Know Your Business, Industry and Numbers
One of the easiest ways to turn off a potential investor is to simply not know everything about your business. You should know your product, your customer and the industry you operate in. Investors are investing in you as much as they are investing in your idea. Show them that you take your business seriously by being able to answer any question, from profit margins to customer acquisition costs. – Shaun Conrad, My Accounting Course
6. Lead With Your Passion
Remember to not quell your passion for what got you excited to start your endeavor down the entrepreneurial path. People buy into passion, and it also helps flesh out your vision. – Brad Burns, Wayne Contracting
7. Create a Compelling Narrative
When trying to get an investor’s interest, remember to focus on more than just figures and charts. These things are important, but investors will also respond to powerful brand stories. Create a compelling story and behind-the-scenes narrative of your brand and how your work will transform lives. Investors are looking for meaningful projects alongside ones that are profitable, too. – Blair Williams, MemberPress
8. Don’t Forget the Team
Investors aren’t just buying into your vision as a founder — they’re also buying into the team you’ve built to execute. Investors will tell you that good ideas are a dime a dozen, but people who can execute are invaluable. If you can demonstrate that your team has experience executing and the character to stay in it for the long haul, investors will be much more interested. – Keith Shields, Designli
9. Beware of the Noise
When first-time founders get into the push for funding, all their contacts with an opinion come out of the woodwork. You will be inundated with people who have a frighteningly passionate view on every side of the funding realm. The best thing to remember is who are those that you truly trust and what you want out of all this. – Jason Khoo, Zupo
10. Know If Your Company Is Set Up for Growth
The one thing to remember is how well set up your company is for growth. If you don’t have a proven system for growing and managing your business, it’s going to be difficult for anyone to want to invest in it. Proving that you have a systematic process for every aspect of your business is going to be crucial to attracting investors. – Maria Thimothy, OneIMS
11. Promise Less, and Give Them More
This is the first thing you need to remember when you are pitching an idea to potential investors. It is always tempting to show those lofty numbers to push your case. Remember, they have been in this business for quite a while, and they know the market values. Even if they don’t know, it creates the best impression on you. Who doesn’t like getting more profit when you promised less? – Vikas Agrawal, Infobrandz
12. Remember They Want What You Have
Always remember that investors want something you’ve got. As much you want their check, they want ownership in something you built with your sweat, tears and blood. It’s critical to remember this so you will always have equal footing in every discussion, as every interaction is a selling event. – Jack Kudale, Cowbell
13. Remember You Are Not Their No. 1 Priority
Although getting outside investment and funding may be your business’s top need, it isn’t theirs. Always keep in mind that there are many other things going on from their end that likely don’t involve you. Stay patient in the process and remain persistent. Don’t become overbearing to the point where you inevitably push them away. – Jared Weitz, United Capital Source Inc.
14. Choose Your Partners Over the VC Brand
It might sound exciting to get investment from a large VC firm, but the truth is, it’s much more about the partner you work directly with than the brand itself. Of course, a big-name VC brand is a positive perk, but the partner you work with is the one that will make your deal the most valuable in the end. – Matthew Podolsky, Florida Law Advisers, P.A.