Top 3 Ways Founders Should Approach Investors
Startup founders are often driven by passion, creativity and a vision for changing the world! And we look for that when we deciding who to invest in. However, when it comes to securing investment and speaking to investors, you’ve got to go in to your meeting the right way! In a world where investors are inundated with opportunities, founders have to set themselves apart by doing their research, networking, and telling a compelling story.
- Be Prepared
It seems obvious, but preparation is key when approaching investors. Start by researching the investor, their portfolio, and their investment philosophy, know who you are about to talk to. Tailor your pitch to their interests and focus on how your company fits with their investment goals. Have clear and concise answers to common questions about your market, financials, and awesome growth potential.
When Airbnb co-founder Brian Chesky was preparing to pitch to investors, he did extensive research on each potential investor and tailored his pitch to highlight the areas of their portfolio that aligned with Airbnb’s mission. As a result, Chesky was able to secure $600,000 in seed funding from Y Ventures. - Network
Building relationships is crucial in the fundraising process. Attend events, meetups, and conferences to meet potential investors, and actively seek introductions through your own network. When you finally get a meeting with an investor, be professional, confident, and enthusiastic. Show that you are passionate about your company and its potential to make a real impact.
For example, when Slack co-founder Stewart Butterfield was raising funds for his new company, he leveraged his network of contacts to secure introductions to potential investors. He also attended industry events to meet new investors and build relationships. As a result, Butterfield was able to secure $17 million in funding for Slack. - Tell a Compelling Story
Investors want to see the potential for a high return on their investment. Focus on your unique value proposition and how your company solves a significant problem. Use data and customer stories to illustrate your points and make the case for why your company will rocket to success. Be clear about your vision for the future and what sets your company apart.
When Dropbox co-founder Drew Houston was raising funds for his company, he focused on telling a compelling story about how Dropbox was changing the way people worked by simplifying file storage and sharing. Houston used data to show the tremendous growth potential of the market and demonstrated how Dropbox was uniquely positioned to capture that growth. As a result, Houston was able to secure $1.7 million in seed funding for Dropbox.
Startup founders must be strategic, well-prepared, and passionate when approaching investors. By doing research, networking, and telling a great story, you can set yourself apart and secure the funding you need to bring your vision to life.
We talk about these principles with founders every day. Not only that, we help founders workshop their idea, practice their pitch, and build out their pitch deck so that they are fully prepared when speaking to potential investors. Join our founder’s portal that is full of tools and information that will help you build an awesome business now!
