How to Find and Use Venture Capitalist and Investors

When you’ve got a brilliant idea for a new product to bring to market or you need to scale to get to the next level, you often need money—more than you can come up with on your own. That’s why a lot of people look to investors for help. People that will give you the cash you need in exchange for equity in your company. The problem? Many people don’t know where to find investors, much less how to gain their interest. That’s why you need to keep reading. We’re going to fill in the investor blanks for you today so you have the knowledge you need to get the money you want.

What Investors Want

First and foremost, investors want a way to multiply their money. They don’t invest to break even and they certainly don’t invest to take a loss. They’re looking for opportunities that can expand their wealth. So how do they determine if you’ve got one? Let’s explore 5 criteria most investors consider:

  1. Sound Finances: Investors live on numbers. They eat numbers for breakfast, lunch, dinner and dessert. And if you want their money, you better know your numbers inside and out. Investors are looking for people that know their numbers. They’ll look for you to be able to quote your margins at the drop of a hat, as well as how much debt you already have, what revenue streams you’ve already developed, and what your customer acquisition costs are—just to name a few.
  2. Unwavering Passion: It’s not enough to have a good idea. You have to have the passion and commitment to stick with it when the going gets tough—because it always does in business. Many investors consider passion to be the most important part of the investment. They can tweak products and payouts but they can’t tweak people and every savvy investor knows it’s the people that make or break profit potential.
  3.  A Strong Competitive Advantage: Chances are, your awesome product/service isn’t the only game in town. And that’s a-ok with most investors on one condition: there must be a clear reason why your gizmo is a better gizmo. If you’ve thought up something that will make someone more efficient, attractive, successful, desirable, equipped, empowered, fulfilled or something along those lines, learn how to  articulate that with confidence and clarity and you very well may find investors eating out of the palm of your hand
  4. A Solid Marketing Plan: Throwing spaghetti against the wall and hoping it sticks is not enough for smart investors. They want plans. Well thought out, realistic plans that address market strengths, weaknesses, opportunities and threats, better known as a SWOT analysis. They want to know what you’ll do with the money they give you. They want to know how you’ll get more people to buy what you’re selling. They want to know you’ve taken the time to develop a marketing plan that has every indication it will succeed.
  5. A Strategic Growth Strategy: Once you get the money you need, be prepared to put the pedal to the metal and turn on your growth capacity big time. Investors want to know you’re ready to grow—that you’ve got the time, strategy and talent you need to get to the next level quickly. In many cases, your investors will want to have a say in all of this but first, they’ll look for you to prove that you’ve done most of the heavy lifting so they can come in to dot the i’s and cross the t’s.

 

Where To Find Investors

Now that you know what investors are looking for, you need to know where to find them. Once upon a time, your ability to connect with investors was limited to who you knew, or rather, who knew you. Today, things are different.  Angel investors can be found at co-working spaces, in networking groups, via business coaching agencies, or by way of our good friends at Google.

The Angel Capital Association website directory includes a robust list of angel groups and accredited platforms across the United States, Canada, Europe, New Zealand, Australia and Mexico. It’s been said that angel investors often prefer to invest in businesses right in their local community, so this is a good source to track potential investment partners right in your ‘hood.

You might also look into AngelList. They were responsible for introducing Uber and Thumbtack to key investors and they can do the same for you. Follow our link to complete a private application that may result in an introduction to prospective investors.

And finally, you might just want to connect with the people you already know. High net worth financial advisors and CPA’s often know angel investors. They may not be at liberty to give you their contact info but if they think your idea is interesting enough, they very well might give your information to the investor and start the ball rolling for you.

Remember, there are other ways to secure investments outside of angel investors. Check out last week’s blog on crowdfunding to learn more about that. And come back next week to learn more about SBA and bank loans as well as modern day loan sharks.

 

{ 2 comments… read them below or add one }

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