Finding the right investors for your company can be a challenge. But it doesn’t have to be. There are many ways of generating interest amongst investors, but there’s one common thread that they all share: Communication. Knowing how to communicate with potential investors may not be easy, but it’s a necessary aspect in getting your message across. It’s also a great skill to develop as part of your company culture and business best practices.
Asking for money can be a challenge. You need to know how to ask the right questions, in the right way, to the right people. So what makes you a good communicator in business? What should you be asking? What should you be listening to?
Here are a few tips:
Before you reach out to an investor, there are some key things you need to keep in mind. First and foremost, you need to know who your audience is. Don’t have a set pitch that you give to everyone. It won’t work, and it shows that you’re not thinking about the investor’s interests, you’re only thinking about your own goals. Try to communicate from a base of understanding your investor’s needs, even if they’re not your investor yet. Think of your pitch as if someone was pitching it to you. What benefit will I have in investing here? Why should I trust this group? How big is the risk, should I choose to take the plunge and invest in said interests? These are all things that investors will consider, and so they should be things that you think about equally, while trying to pitch them.
Find a common ground to connect with
If you’re a new business, or one that needs to grow, you need investors. But, a common misunderstanding that many new businesses have is that investors need you just as much. That’s why, it’s important to find a common ground where both your business, and their investment needs are met. This is very well illustrated and explained by EquityNet’s Patrick Moss, who concludes that:
The most effective ways to connect with an investor is to identify a mutual acquaintance that the investor trusts. This may be a friend, family member, colleague, or a connection made through social media. If you understand the relationship between this person and the investor, and it’s apparent that they are on good terms, then there is no harm in asking for an introduction. Doing so helps place you in a position of trust and greatly increases your odds of successfully connecting with an investor.
In other words, the importance of networking with people you know, and building rapport with potential investors, even before the investment proposal is pitched is critical. Think of the investment world as a cocktail party. You need to gain the trust and respect of investors by speaking to them in relatable terms. You need to find common ground where you can relate to certain practices and terms. And then, you can talk business. Don’t rush into pitching your ideas right out of the gate. People are more inclined to invest money when they trust where their money is going. So understand that, and try to put yourself in their shoes.
Investing takes confidence. Getting people to invest in you take even more confidence. But a pushy sales pitch doesn’t go over with anyone. Be assertive, talk about your vision, and most importantly, communicate who you are, and what your values represent. If you communicate well, finding the right investor, and fit for your company can be easier than you think. You just need to communicate clearly, and believe in yourself.