By: Roy Murad
I have spent my career starting new companies, investing in start-ups or connecting investors with entrepreneurs. I know within minutes of meeting someone whether their business will have a chance of attracting the attention of an investor and if they have the attitude to succeed.
The most common mistakes entrepreneurs make often start before an initial meeting even takes place – they start at the planning stage. I can say with certainty that I’ve heard more bad pitches than good and offer the following advice to any entrepreneur looking to gain the attention of an investor.
4Ps: Plan, plan, plan and practice
Like a good carpenter who measures twice and cuts once, a good entrepreneur should always create a solid business plan based on in-depth research and a realistic expectation of the marketplace. Before you even consider sitting down with an investor, or potential partner of any kind, do your homework and have every possible question answered. Preparation will yield confidence and confidence will yield consideration. Once you are prepared, practice. It may seem strange, but ask family, or friends to listen and take on the part of a potential investor. Have them look for holes in your presentation and ask you the tough questions. The more holes they find, the better your presentation. After they’ve been tough on you, thank them!
Despite what you think, nothing sells itself.
You are your business’ biggest fan and that is exactly how it should be. However, remember that not everyone will fall in love with what you are offering at first glance. A solid marketing plan will bring attention to your product. Combine an aggressive marketing plan with the passion that only you can bring and people will take notice. They will have to. While your passion may come easily and without financial cost, marketing initiatives that will make others pay attention require both substantial effort and at least some financial investment, whether you hire an outside agency or consultant, or attempt to do it yourself. Don’t shortchange the need to invest in bringing your world-class offering to market. You really do have to spend money to make money. Just be smart about it.
Product is important, but people matter more.
It is easy to get wrapped up in your business and the success of a great product offering. But, never forget those who have, or continue to, support you – especially any early employees who believed in you and put in 100% to see your vision become a reality. Your product or service is important, but your support system is even more important. Even when looking for potential investors, or partners, it is critical to look for those who share the core values that you hold dear. Successful long-term relationships are built on common values and a desire to succeed, NOT money.
Think you can do it all yourself? Not if you want to succeed…
Surround yourself with positive people who will support you at every stage. Your family, friends, mentors… as you go through the ups and downs of owning your own business you will need a support system. Success is not solitary. Besides, you’ll want somebody to invite to your celebration when you’ve realized your dreams.
It truly isn’t what you know, but who you know. Network, network and network to build that support system discussed above. You never know where you’ll find a mentor, an investor, or a collaborator. While the thought of putting yourself out there makes you uneasy, only you can incite interest and passion for your business.
Be adaptable. Be open.
Don’t be too locked into your vision. Remember that often those you are seeking as partners, or investors have been in the industry for a long time and can provide advice to help lift barriers down the road. Listen to them; consider their suggestions; and commit to the recommendations that you feel best about. With an open mind you might find a great opportunity that you may not have recognized at first. It might be a small tweak to your vision or implementation plan, or a large change, but if it strengthens your business, don’t be too stubborn to accept it. By listening, you are creating trust and that is a key value for any business partner.
Know more about me than I know about you.
You have your plan and your argument ready because you have practiced over and over (and over) again. You’re ready to walk into a potential investor’s office. What do you know about the person, or people with whom you are meeting? Take time to research your meeting partners and go in armed with intelligent questions that relate to their historical success and potential contribution to your business. Show interest in them and get to know their working style and culture… that should be as big a factor as their investment.
Not investing in yourself
If you don’t believe in yourself and your business why should you expect others to believe enough to invest? You need to ask yourself, if I’m a risk worth taking… and make no mistake about it, you are asking investors to take a risk. Ask yourself, “How much of my own capital am I willing to risk?” If the answer is minimal, you can be certain that an investor will see that as a red flag. People don’t invest in companies… they invest in people.
Learn from your rejections
Rejection happens to the best of us. It doesn’t mean that you are a failure; it means you haven’t found the right fit. However, don’t automatically assume that “those in the meeting just didn’t get it.” Take the feedback provided and improve your business, your pitch or your approach. A rejection might just be the best thing that ever happens to your business.
About Roy Murad
Roy Murad is a father, husband, business consultant, investor, advocate for new business ventures, and consummate entrepreneur. Over the course of 35 years building businesses, guiding companies and identifying strong investment opportunities, while nurturing a thriving family, Roy Murad has amassed a wealth of experience; experience, that may be of value to others who are looking to shape a balanced and successful life experience. For more about Roy Murad Please visit us roymurad.ca