One of the most difficult aspects of starting a business is raising enough money to get it off the ground. While some entrepreneurs choose to bootstrap their venture or borrow money, a good number of startups go the investor route. This path presents another challenge: How do you get somebody interested enough to invest, without overwhelming them with an avalanche of information?
Many members of Young Entrepreneur Council know what it takes to attract (and keep) investor attention when you’re raising capital. Here’s how they recommend engaging with investors if you want them to commit to your business.
1. Get Warm Introductions
Carve out your network for introductions from founders or other investors — warm intros are essential for investors. You should be able to summarize what you’re working on and why it’s interesting in roughly three sentences. Give a high-level overview of the business in one short sentence. Then, add a little more exposition. Finally, get to your “north star” metric and showcase your main selling point. – Kevin Wu, Pathrise
2. Set The Communication Cadence Up Front
Raising a friends and family investment round leaves much of the formal communication cadence up to you, the founder. Our strategy from the start was to let investors know to expect a monthly rundown of what happened that month, what initiatives we were beginning the following month, and any “asks” for what we needed help with (which they could follow up on). – Keith Shields, Designli LLC
3. Learn To Speak Their Language
You have to know your audience. It is important to put your data and statistics in terms that the investor understands. If you’re pitching Mark Wahlberg, for instance, it would be smart to compare your company to the Boston Celtics, if applicable, because Mark is a huge Boston fan. – David Chen, Sharebert
4. Understand What’s Important To Your Investors
I have found that the best way to attract investors is to be able to position yourself in their shoes. Why should they invest? What are they looking for? Cater your pitch to what matters most for them, not you. – Eugene Gold, Eugene Gold ENT
5. Believe In Your Own Cause
Investors like founders who seem confident rather than those who appear boastful. The best way to exude true confidence is to honestly ask yourself whether your company and vision is worth investing in. If you truly believe it is, your confidence and belief will come across naturally to investors, simply because you are telling the truth. – Alexander Young, VirtiHealth