The Top 3 Types of Investors And How You Should Pitch To Them
Just like when you are doing marketing for your brand, one of the most important steps is to get to know your customers. You have to understand clearly on what they are looking for so by creating various personas and try to think like your customers. Only this way, you can better pitch your products to them. Just like the way you pitch your products to your customers, you also have to know your investors before you pitch to them. Here are 3 types of investors that you will run into and what they are looking for when they invest in you, and how to be prepared when pitching them.
1. [Angel Investors] Angel investors are your friends. They will support your dreams. That’s being said, they are not like other investors, they usually invest in the idea because of you. They invest because they like you, because they feel the click between you and them. They care about their returns, but they care more about if you are the right person to invest. They are usually investing in with their own money, so they do not have a team of analysts to do due diligence and calculating on KPIs. So, make sure when you pitch, bring your passion for the project and be confident.
2. [Venture capitalist] This type of investors is more serious than angel investors. They care about KPIs, and when they invest in your ideas, they are expecting the second rounds. The investing process from venture capitalists are usually very long. Because their funds are usually from someone else, and they are paid by percentage management fee. However, if they managed to invest in the next “Uber” they will share profit with the funds. They do due diligent and have a check list to go over in order to make sure they invest in the right business.
You will talk to an investment manager first and get reviewed by their team of analysts before you receive any money. So, when you are pitching, make sure you have strong team profile, an MVP, and some mile stones for them to review.
3. [Strategic investors] Strategic investors are also known as corporate investors. They are investing because they want to grow their corporations. Their investing money from their company, and they are not expecting a huge return on finance side when they invest. They are investing probably because they consider you as a potential competitor, or they think your product may further help their products to grow. That’s why it is called strategic investment. They care about if your products can help them to grow. Usually there will be no long process due diligent, no analysts, nor do background check. They are not here to support your dreams. So, figure out what they are looking for investing in your project.
Above are 3 types of investors that you will run into in the future, and tips on how to pitch them. Having a startup is not easy and being a CEO is not easy, too! What types of investors are you encountering with currently? Let us know in the comment below and see if we can provide some more tips for you.
Clarence Wooten on LinkedIn: https://www.linkedin.com/in/cwooten
BOOSTO is an influencer driven decentralized App store, aims to empower global influencers and developers through unleashing the full potential of influencer led communities, by using blockchain as a foundation of trust and tokens as incentives to build various interactive decentralized applications.
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