Wooing investors is much like snake charming except in this case you are attempting to charm money out of somebody’s pocket. Like a snake charmer you have to get every tune and every movement right. If anything is out of place the entire act will fail.
There are certain things that can be considered the basics when it comes to wooing of investors such as:
Get you numbers right: When a business gets to the point of seeking investors then it is natural to assume that the owners of the business have their numbers ready. You should know how much you’re asking for, what this money is for and most importantly how you’re going to get it all back and more.
This is not about speculation but about doing research with suppliers of the raw materials, tools and etcetera. It’s about knowing the potential customer base for the product based on reliable sources. There is no better product of business for investors to finance than one that has customers waiting.
Be honest: Being honest with an investor may not always be to your advantage but the moment investors discover you are hiding something then there is no chance of them working with you. If there is a challenge that may compromise the business then it is better to let the investor know all the facts.
The disadvantage is that the investor may decide it’s too risky but the advantage is that they may decide to still invest with you and may even give you good ideas on how to evade the challenges you’re facing.
Be customer oriented: There is nothing wrong with a brilliant idea but to investors ideas are only worth investing in if they are marketable. The only ideas worth investing in are those that have a potential customer because without a customer the investor may as well be financing a research venture.
Show that your business is about giving customers something that they need or something that they can use in one way or the other. Be the customer and ask yourself whether or not you would buy what you’re selling.
Confidence is key: When somebody shows confidence in their idea, it tells the investor that there is something special about your idea that makes you believe in it so much. Familiarize yourself with your idea and find the thing about it that makes you believe it can create a viable investment. Remember that confidence is not the same thing as arrogance.
Arrogant people may be confident but their arrogance may make them fail to see certain problems that will confront them or make them underestimate the problem or overestimate their own abilities.
Presentation: You may only get one chance to demonstrate to your investor that your idea is viable. Prepare for the presentation well in advance to the point where you’ll be able to pull it off within a second of being asked to demonstrate your idea. If you only get one chance then you have to make it work at that time.