Picking The Right Time To Target Investors
There’s a time and tide for everything, just as there are seasons. If you understand cycles, you’ll get what I’m saying here. Very often, I find professional fund managers and founders make this same mistake when raising capital — they target investors at the wrong time. They don’t weigh in the seasonality of raising capital.
So what is the right time to reach out to investors. The answer is not “always”. If you want to make real progress, think of investors just like yourself, well, ok, maybe not like your aggressive self, but as normal human beings.
This is so important, because even in my previous firm, it took us a long while to realize the importance of reaching out to the investors at the right time. And what are those times?
There are basically two time frames you have for raising capital — February to May, and September to November. If you’re from the US, that’s around Spring and Fall. Between these two seasons, investors are usually vacationing with their family or friends.
Getting an investor to make a decision during this time is going to be really difficult, if not, it will be very slow.
Why did I exclude Jan, well, everyone is back from the new year celebration, they may be in a good and optimistic mood, but they’re now either closing their books for the previous year and concluding their audit, as well as preparing themselves for the year ahead. They’ll be back in action by February, which is probably the busiest period with a flurry of activity.
Why did I exclude June, well, by then everyone is planning for their vacation! Just (partly) kidding. Larger deals take time to close, even smaller ones would require a due diligence period of 4–5 weeks. So if investors can’t expect to close and follow up before then, they might as well try push things till after the vacation. Hey, they’re looking forward to it after all that ‘hard work’ of investing!
If you’re in the Middle East, you also need to keep in mind two things, one is the summer — it can get very hot here, reaching 40+ degrees. Anyone and everyone, would love to escape the heat. And if you’re a Muslim, you also have the holy month of Ramadan, which is the fasting period and pretty much everything things slow down. It’s not easy to make a decision on an empty stomach — go ahead, try it once. The timing of Ramadan changes like Lent over time, so keep that in mind when approaching the region.
Why did I exclude December, that’s because pretty much every investor I know respects that the whole world slows down during this time for Christmas and New Year. If you’re in the US or targeting US investors, the period starts from the end of November, i.e after Thanksgiving — so basically from 23 November all the way to 6 January is the holiday season.
So if you’re planning to pitch investors, get your act together before these two windows of opportunities and you’ll have a better chance of raising capital.
Now, of these two periods, which is the best to target investors? To find out, sign up for the PitchProcess Masterclass or Mastermind and we’ll spill the beans on increasing the odds of your success my as much as 50%!
Originally published at PITCHPROCESS.