How To Approach Investors For Funding: The Best Tips For You

How To Approach Investors For Funding: The Best Tips For You

approach investors for funding

There are smart and effective ways for you to approach investors for funding your startup or business venture. When you are in search of capital to fund your business, it is always natural for you to want it done as fast as possible. However, identifying and approaching the right investor needs proper planning and process. Sending quick emails to dozens of investors will be counterproductive. 

Also read: How to build your business from scratch

You need to know that the average investor receives tens of pitches each month regarding business funding proposals. There are effective ways to approach investors for funding, and you need to understand how it works. Over the years, in my experience in the business environment, there are four proven means to get this done. Now, let us get down to business and consider these effective tips on the best ways to approach investors for funding. 

Smart Ways To Approach Investors For Funding

  •      Ensure you get introduced by a trusted source

You don’t rashly walk up to an investor that you haven’t had a business transaction in the past and start seeking for funding. Before you approach any investor for funding, you need to do your homework on the investor. Identify who holds the most potent sway on the investor that you seek funds from. You can go through the person that has brought good deals to the investor in the past. 

Successful and savvy entrepreneurs create ample time to do their due diligence on possible connections. These entrepreneurs also ask critical questions regarding the connector for the introduction. You should avoid getting referrals from another investor. Any time an investor gets a referral from another investor, the first question is always, “are you investing?” As an intelligent entrepreneur, you need the answer that will be in favor of your goal and not against it.

When the investor making the introduction has a different investment focus than your business, and there is a reasonable answer to why he is not investing, it wouldn’t hurt your target fund. 

  •      Develop and build a relationship over time

It will be very good to build a quality relationship with the investor over time. When you don’t have a strong network to provide an introduction from a strong source, building the relationship becomes your best option. To approach investors for funding is never a stroll in the park; you need to have your game plan well laid out. You can devote time to follow the investor on the different social media platforms and make meaningful comments on their posts. 

Also read: How to avoid bad debts in a business 

  •      Seek for advice first, before money

Most times, investors are not looking to write you a check straight away, so you need to get close first. You should start with soliciting for advice on a specific matter like best marketing and sales strategy, business model, target market approach, etc. Go back and execute on the investor’s response ad ensure that you show appreciation for the guidance. 

  •      Be personal with your approach 

The number one rule on how to approach investors for funding is to target only the investors that your business fits into their specific area of focus. If this is not the case, you will certainly be wasting your precious time as well as these investors. Before you approach an angel investor or venture capitalist, make out time to study their investment portfolio. Whenever you reach out, ensure to be very specific in your approach. Make sure that you perfectly understand your potential investor’s area of interest, vision, etc. 

Conclusion 

It takes a great deal of patience and preparation to seek funds from investors and venture capitalists. You need to understand that there is no shortcut here; everything must be done accordingly before you can achieve the result. With these highlighted tips on how to approach investors for funding, you can now prepare very well before seeking funds.

I would love o hear your thoughts on this topic, so kindly make use of the comment box provided below.

 

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