I had the pleasure of participating in a forum where start-ups presented to Angel Investors several times a few years ago. Since I am a huge fan of the Dragon’s Den, this was like a mini-version but up front and personal.
Since one of our services is working with small business and introducing investors, it was a great exercise to listen to the presentations and try to figure out myself why one company would hold an interest for investors and another one would not. It is hard when you see how much the founder believes in and is passionate about what he/she is presenting and wonders why investors are not flocking to them. Since that time I have been asked by a couple people about my thoughts concerning investors and what they are looking for, so I thought I would share this hoping it might help an entrepreneur seeking investment in tightening up their story/plan before approaching an investor.
These tips have been developed through my work with the financial community. Remember to keep in mind that approximately only 1 in 10 start-ups actually succeed and that investors are looking for that 1, not the other 9.
10 Tips to Consider Before Looking for Investment
Of course since the Dragon’s Den is on television, there is drama added to keep the interest of the viewer, but the investors sitting there and the comments that are given are exactly what you can expect minus Kevin O’Leary yelling at you that he wants to make money , you are a wing nut or he wants you to evaporate. How many times do you watch and see someone unprepared, someone ask for a million dollars without any of their own investment or a product or revenue, or someone not have the background or expertise and are looking for a Dragon to take their idea, the risk and invest their personal money? Private equity is a business and any Angel or Venture Capitalist is not investing in your business out of the kindness of their heart. They are looking to make a profit. For the investment, they also can help a business as well with contacts, marketing, distribution or other requirements – but the bottom line they are doing this to help increase their profits.
Before you ask someone to take a risk in you and your business, make sure you have all the i’s dotted and the t’s crossed so that you find the right investor and the money you need to help your business take off.
RK Fischer & Associates