How to speak with investors – Top Tips

Raising funds – The right way

Many entrepreneurs, unfortunately, believe that raising funds for their business is a sales process and that embellishing on the story is an acceptable part of self-marketing. However, lying to an investor is never justifiable. Our business growth experts at Alexander & Co are here to tell you why.

Experienced with people

Investors work with a myriad of people. Through constant interaction every single day, investors are talented in analysing body language and human nature. In other words, experienced investors can recognise a lie when they hear one.

Even if you have mastered the ability to tell a lie, there’s a due diligence process that includes forensic accountants, lawyers and analysts. Here, there is an even higher chance of everything falling apart.

Investors are former entrepreneurs

Don’t forget, most investors are former entrepreneurs. They have been in your shoes before and have dealt with the same problems. Do you really want to hurt your long term ambitions for short term gains?

How do I speak with investors?

Here are a few steps that you can take to enhance your ability to turn an encounter with an investor into a mutually beneficial relationship

  1. Instead of providing investors with an outrageous prediction. Provide them with 3 different ones.
    1. A prediction if things don’t go your way
    2. A realistic prediction
    3. Finish with an optimistic final prediction – ending your list with good news.
  2. Use analyst firms to look at projections in your market. However, don’t think about the numbers. Instead, present the facts of why your market is likely to grow.
  3. Acknowledge your main competitors and where this competition is coming from. Detail your strategy of how you will deal with the threat.
  4. As much as the investors are interviewing you, you’re also interviewing them. Ask investors about their strategy, how they like to work with entrepreneurs and what they look for in a company. Any experienced investor will appreciate that.
  5. Mention your social media strategy. How do you plan on using sites like Facebook, LinkedIn, Twitter, maybe even YouTube, or, other sites that can increase awareness of your company and help build relationships with customers? How will you measure this success?
  6. The majority of investors won’t commit to anything in the first meeting. Therefore, it’s essential that you follow up with a thank you and keep them in the loop as you move forward. As you are showing them how your business is evolving and how your track record is improving, it will become more likely they will want to invest.
  7. Even if the investor decides not to invest, it’s important you stay calm. You never know what will happen in the future, and burning bridges never benefits anyone. Even if you believe the investor is 100% wrong, keep things coze, keep moving forward and you will you be in a great position if you meet again.

 

Looking to grow your business? Make sure you have an accountant on your side when moving forward. Get in touch with our friendly team of experts today and start growing your business.