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Prep

Funding 101: Prep

 

Making a Good Introduction

Like any other business situation, your first impression with a potential investor goes a long way. There are a few ways to get it right and endless amount of ways to get very wrong!

In order to understand why your pitch will resonate with investors, you need to understand a little bit about the person you're contacting.

Understanding the Investor

Let's assume you're an investor. You've hung your shingle out to the world that reads "I write checks to people with great ideas." That's a sign for every person who has ever sought capital to come seek you out and pitch you.

Soon you're getting an endless stream of ideas pitched to you - most of them horrible - that you have to wade through every day. How are you going to respond appropriately?

First, you're going to gravitate toward the deals where you have a good understanding of the business the entrepreneur is in. You're also going to listen more closely to deals sent to you by trusted contacts since they will have done some of the vetting for you.

..investors are people just like you who are looking for good, honest relationships with people they believe in.

Last, you're going to look for good, honest pitches. You're not going to respond well to cheap sales tactics or "can't miss" deals.

Basically, you're going to respond to stuff just like anyone else would.

With that in mind, consider the fact that investors are people just like you who are looking for good, honest relationships with people they believe in. Your introduction to these investors should mimic how you would like to be introduced to anyone else. It's really that simple.

Look for Personal Introductions

The best introduction you can make to an investor is through a contact they already know. This actually solves a lot of problems that investor often deals with, including which deal to look at more closely.

A solid personal introduction will allow the investor to spend less time trying to find out if you're a serious candidate and more time thinking critically about the value of your opportunity. That's because personal introductions suggest that someone is willing to go to bat for you, which they wouldn't do if they didn't think you were a quality person.

Get to the Point

You have one great idea that you want investors to look into. So do thousands of other entrepreneurs trying to pitch the same investor. That means the amount of attention your pitch is going to get is minuscule at best.

Think about your pitch in terms of a commercial on TV. You've got less than a minute to get someone's attention to dig in further. After that, you're asking too much of their time.

Think about your pitch in terms of a commercial on TV. You've got less than a minute to get someone's attention to dig in further. After that, you're asking too much of their time.

That means your first contact with an investor needs to get to the point very quickly. This is commonly known as your "Elevator Pitch", or the pitch you would give to an investor if you only had enough time to ride the elevator with them.

Summary

Every investment starts with a good introduction. The better the introduction that you can get, the more likely you will be to stand out and be taken seriously by the investors. You won’t get a ton of introductions so make the ones that you do get count.