When starting a new business or trying to grow an old one, money is always the first thing you'll need. As the old saying goes, money doesn't just grease the wheels of business; money is the wheels of business. It's the key to everything in business, and if you can't get it, your business plans won't even get off the ground. So, what do you want an investor to have? Some investors, called venture capitalists, spend money on your project on behalf of a large group of other investors. This is similar to how a stockbroker or investing firm works.
On the other hand, there is a type of investor who puts his or her own money into companies that are just getting started. They are taking a risk and are usually careful about where they invest, but they do invest somewhere. With the right sales pitch, that somewhere could be your company. These investors are known as "business angels," and they can work alone or with other investors. They could invest now while shares are cheap, wait a few years for your company to grow, and then sell to other stockbrokers or back to you if you've made enough money.
The problem is, of course, that business angels use their own money to invest. No one is more careful with his own money, as the saying goes. Business angels will be very careful about where and what they invest in, so if you want to succeed and get the money you need, you'll need a bulletproof sales pitch. Getting ready is important. Before your first meeting with investors, make sure you know everything there is to know about your company, your market, your target audience, and your location. Nothing impresses people more than having a ready answer for every question and a lot of hard evidence.
Also, make sure you have a good business plan that is clear. Know how many employees you'll be paying, what equipment you'll need to buy, where you'll be renting an office, and how all of these costs will translate into profits at the end of the year. Investors will be hesitant at best if you don't have a clear plan for how you'll make money. If you know how you'll get your money, you'll be better able to tell other people what will happen.
Before you go to the meeting, think about what you might be asked. Think about what you would want to know if you were the investor. Questions like "How much do you think you'll make the first year?" and "How do you think profits will grow over the next 10 years?" are common, as are questions that are more specific to your situation. Know what makes you different from everyone else. Why should the investor give money to you instead of the next person in line? Show them what makes you different, and you'll get rid of the competition.
A lot of what happens at these meetings has to do with how people think. Make sure you yourself are confident in voice and posture. If you know you can make money, you'll be much more likely to convince an investor of that. A straight back and a strong voice can do wonders and are often more effective than strong logical arguments for what you say.
Make sure you're also on board. Investors will think you are trying to scam them or don't trust your own company if you haven't put in as much of your own money as possible. If you put a lot of time and money into your business, investors will be more likely to believe you are committed to seeing it through to the end.
