How To Approach The Investment Process | Alex Solo
Raising capital is a difficult thing for businesses, especially new startups. How can you get that initial investment so that you can grow your company?
When trying to get funding for their businesses, many entrepreneurs approach investors and pitch their idea at the time that they need money. The problem with this is that why would someone give you a large amount of cash when they don’t know anything about you?
So what things should you consider when approaching the investment stage?
- You need to have a long lead-up period
Think about approaching and pitching your idea to investors a long time before the time that you actually need the cash. This gives investors time to actually get to know you and your idea.
- Meet anyone and everybody
Whether they want to invest themselves, might know someone who is looking to invest, you need to start building your investing network.
So what is the first step I should take?
Build a network early on
The earlier you can start, the better. This includes meeting people without any agenda. Get to know their business, and let them get to know yours. By building that informal relationship first, sending a pitch deck to them later on will feel much less strange.
Even if you have this relationship, an investor will still ask you some questions:
- What are you using my money for?
- Why do you need it?
- What’s your spending plan?
If you can’t answer these questions, you will have a hard time trying to convince any investor to give you their money.