Building relationships with investors is like dating
Hi stranger! Will you marry me, have two kids with me, and adopt a havanese puppy for our kids to play with?!
And…rejected!!
This is what it can feel like for an investor when you meet them for the first time and ask for funding. You are asking them to invest their time, energy, money and stick around till the very end. How about you first date before asking to make such a big commitment?
“Hello, I exist!”: Visibility
Whether you find a high school sweetheart, use a professional dating service, or keep it spontaneous, you want to first make yourself visible. There are plenty of fish in the sea but if you don’t swim with the fishes, they won’t spot you. Entrepreneurs need to go out into the private capital market and talk to all potential investors. These are called introduction meetings.
Just like speed dating, introduction meetings are a great way for investors to learn about what you do and give them an opportunity to talk about what they can offer. This is your chance to blow the investor out of the water and make them wanting more. But, remember to be you. Don’t tell the investor what they want to hear, be genuine, because they are smart and will figure out the truth very quick.
Be transparent and allow the investor to offer advice and pick apart details. Entrepreneurs often become defensive when VC firms or Angels pick apart their idea and are not open to listen to their perspective. Show them that you are willing to listen and change behavior as needed. Haven’t you picked on someone at school that you liked? Maybe, it’s not a bad thing after all.
“That was fun, want to continue?”: Viability
Now you have list of potential investors and they know you exist. Make that relationship stronger. Relationships form at different paces, don’t rush it. Whether it takes a couple of weeks or months, you want to prove why your company is viable.
Keep in touch with the investor periodically (not every day) and update them on wins and pain points. You may not get any response from them and think you are getting the cold shoulder, but be persistent. Even though you haven’t heard back, they are listening to you and may invite you to meet the family (pitch meeting) sooner than you think.
Whatever you do, don’t end on a bad note. The investor may be best friends with your perfect match and if you piss off the best friend you can kiss your perfect match goodbye. It can feel demoralizing when you don’t hear back and are tempted to say “I have emailed you so many times and you don’t even respond! You jerk!”. Show emotional resilience and move on.
There is no one in this world that is curious about where their bf/gf or crush ended up…right? WRONG! Even if it didn’t work out, your investors will either be curious on what your company is up to or will not be able to ignore you once you pop up in media everywhere with the great deal of traction you are generating. Even if you were denied in the beginning, the one who rejected you may come back to rekindle the relationship. So again, remember, don’t end on a bad note. Yes, your company could have been a failure and in that case the investor can be reassured that they made the right decision.
“Started from the bottom now I’m here”: Traction
Did Drake really start from the bottom? With very minimal research that I did on this, it depends on what your baseline of “bottom” is. Whether he did or didn’t start from the bottom, let’s respect the fact that it has helped him market himself and his album. This song has caused millions of folks to search his background and learn about his roots. Publicity stunt? Not sure, but I will ask him the next time I see him.
While it seems that this song and Drake has no relevancy on building investor relationship, we can learn a lot from it. In the beginning, you may be no one. You want to hustle, speed date, and build relationships from the start. Don’t wait until you need funding. It will be too late. Build an army of investors who believe in your mission from day one and are willing to be by your side till the very end. This sort of traction will help open doors for you now and into the future. Push funding aside and let it occur naturally.
“I am ready to date, where can I begin?!”
Great question! You can use Match, OkCupid, Tinder, Hinge, Coffee Meets Bagel, PlentyOfFish, and on and on… Oh wait you meant how do I start connecting with investors? Well there is … oh yeah nothing!
Never fear, Waccal is here! We are removing inefficiencies and modernizing how private capital is raised. Gain momentum behind you and your company, build rapport and relationship with potential investors and users, and manage current investors and portfolio companies. For the first time, ever, do all of this on one single platform. Waccal removes the bulls***, inefficiencies, and inaccuracies that come with all of this so you can focus on what’s important: Growing. How do we remove the bulls***, inefficiencies, and inaccuracies? Our data is cross-checked and verified, we remove repetitive and tedious tasks, our UI and UX were built with the user in mind, and have automated tasks that take away a lot of brain power but are low in value. Create a free account today: Waccal
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