Meeting With Potential Investors? Here’s How To Prepare

 

hand-427509_1920Nearly all startups struggle to get funding. There are a number of obstacles that startups can face, and many of these difficulties are specific to particular startups. But funding is an obstacle all around. When entrepreneurs struggle to get funding for their startups, it is easy for them to feel defeated. But getting investors doesn’t have to be impossible. Funding can be obtained through venture capitalists, equity crowdfunding, and angel investors. You just need to be prepared. Here are a few things you should do before you meet with an investor:

 

  • Think about your life story

It is important not only to consider your project but to consider yourself and what you bring to the table. Think about how you arrived at this point in your business. Investors want to know how your background drove you to create the solution that you’ve built. They also want to know about the previous experience you’ve gained. Make sure you show investors your passion. Don’t just briefly think about your story and wing it. Practice telling investors your story. Include what you company does, who you are and how you got to where you are, all within a somewhat short time period.

 

  • Know your split

The amount of equity investors will want varies from investor to investor. As an entrepreneur, you will likely have your own ideas about equity offers to investors. It’s always best to go into the meeting with your own idea of what is a reasonable split. Make sure you don’t give away so much money that it decreases your incentive to work. Make sure you do the math and run the numbers so that you know when the deal makes sense and when it doesn’t.

 

  • Know what the money will be used for

Plan out what you intend to do with the investor’s money. Startups are ever-changing, so this doesn’t have to be written in stone. However, it is a good idea to have a plan that show the “big idea” of your venture. Investors want entrepreneurs to tell them honestly what the money is for, even if it’s to hire more people or purchase more space. If the investors don’t agree with the ideas that you have laid out, they’ll still be happy to see that you know what your next steps are.

 

  • Don’t promise too much

When you meet with potential investors, they are bound to ask a lot of questions. You need to ensure that you are honest with them rather than giving false answers just to impress them. When you’re leaving a young company, there will be aspects of the company that you haven’t figured out yet. Do not hide your uncertainty by lying or over promising. Wes Bergmann, an angel investor at Betablox Business Incubator, said that he will sometimes ask questions to which there isn’t an answer just to see if entrepreneurs admit when they don’t know. If you can recognize your company’s current limits, this shows that you will be able to look at your state of affairs realistically.

 

As an entrepreneur, you’ve worked hard to get where you are. Don’t let funding be your only hang-up. Get prepared and practice pitching to investors so you can get the means to success.