By Tian DuBelko
Just about all startups could use some help when it comes to meeting investors. This rings true no matter if you’re a big startup in a big metropolitan area like New York or Silicon Valley, or a startup in less densely packed areas like in Seattle, WA.
During your journey, there will come a point where you’ll need to meet with investors and tell them why your company is the right investment choice. Between venture capitalists, equity crowd funding, and angel investors, there are more and more avenues of funding available. In this article, we’ve put together a list of things you must know before even stepping into the same room with a potential investor.
Know your story
There is more to your startup than simply your product or service. It’s about your team, yourself, and how your business has managed to get to this point. Investors are curious about your background and how that’s led to you bringing them the solution you’ve created. Before they invest in you and your company, they’ll want to know about your previous experience and why that makes you the right person to invest in.
At the end of the day, investors are still people. They’re interested in more than simply investing in a company. They want to invest in the person who came up with the company. Give them a reason to invest in you. If you have your story down pat and well-practiced, then you’re giving investors more reasons to invest in both you and your startup.
Know the split
Entrepreneurs often have their own ideas about equity offers from investors. Depending on how much of their money they’re putting up, investors might want a little bit of equity or a lot. In either case, it’ll help your negotiations if you have a clear idea of what you’d consider a fair split before heading in.
Be sure to do the math before meeting with any potential investors. And no matter if you’re offering them $50,000 for 10 percent or %250,000 for 18%, make sure you double and even triple check your work before presenting financial figures to any investors.
Know where the money is going
Investors like it when you have a well thought out plan of how you will be using their funds. And while things in a startup are always changing, it’s good to have a large, overarching plan for your company. It’s easier to make decisions such as hiring people or renting more office space when there is a core financial strategy in place.
Always be upfront with your investors about their money. Even if they don’t agree with all of your terms and ideas, they can appreciate a clear outline of how you will use their funding to grow. Investors are much more likely to commit to a founder who has mapped out his or her next steps.
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