Entrepreneur horror stories: What NOT to do when meeting an investor for the first time
"Venture Giants has compiled a brief guide on how to meet the investor contacts that you receive through our platform"
Success! You have received investor contacts through Venture Giants and have paid your listing fee and received the contact details of your investors. Now what?
We have compiled a brief how-to guide on meeting and dealing with your investors for the purposes of raising investment for your business.
We understand that it can be nerve racking experience even for the most experienced entrepreneur out there as you are going to have to be willing to pitch your idea and stand-up to the scrutiny of an angel investor who is a successful business person themself and conducting yourself in a professional manner will really set you up with the maximum chances of raising investment in the future.
Some useful statistics on the investors that we approve on Venture Giants
Though all entrepreneurs must always carry out their own due diligence on ANY investors that they meet, we always review all investor registrations personally before they are allowed to contact any entrepreneurs on Venture Giants.
On average, for every single investor contact made we have to send a proposal to 250 - 300 vetted investors. To compile those 250 - 300 investors we would have declined about 800 investor registrations – so it has been the accumulation of many years of hard work that has allowed us to build the network of users that you are able to benefit from.
Responding to an investor contact
Our best advice to ALL entrepreneurs is to always understand investors are highly successful people and most will be running several businesses. The stress placed on them on a daily basis can be massive and a lot of entrepreneurs, being business people themselves forget this very fundamental fact.
So it is very important for entrepreneurs that are dealing with investors to exercise patience when dealing with investors. Do not expect an immediate reply to your communication and do not send to much correspondence over initially as this can seriously count against you.
This may not be the advice you are looking for – or you may wish to deal do a deal overnight – but, running Venture Giants we have seen many entrepreneurs lose our on major deals simply because they pushed too hard .
We have also seen entrepreneurs make the mistake of first sending a polite courteous email (GOOD!) and then two days after a slightly more abrupt email demanding a reply (NOT SO GOOD!) and then a few days later a very aggressive email demanding the reason that they have not been in touch.
You can imagine what the reply will be when the investor finally did sit down to make a response.
Angel investing is a human proposition and the results vary drastically from person to person. So it is not uncommon for us to receive feedback from one entrepreneur that this investor was very rude etc and then suddenly receive a glowing endorsement for the same investor from another entrepreneur and that they are in advanced negotiations to take the deal forward. Angel Investing – much like dating - is a process that does not happen overnight, so in the truest sense of the word, not acting overly eager in front of investors that have already shown interest in your proposal can be far more beneficial for you, and can leave a far more favourable impression long term.
The most important point to note is that we are here to help if you fail to get in touch with the investor but our general rule is to wait for a period of 10 working days from your initial email to them. This may seem excessive to you but it is our experience time and time again that has shown that genuine investors never respond immediately and giving them that space will only bolster your negotiating position.
Once you have established initial contact with the investor and gained their interest it is likely that negotiations will move along a lot quicker, but exercise patience initially.
Sending a Contact Request through Venture Giants
After you have paid your fee with Venture Giants, you may notice a “Contact Investor” button next to the investor that has made contact with you. This function will send an automated courtesy email to the investor that contacted you through Venture Giants, sending them your contact details. It is important to note that a contact request is not to be solely relied on when contacting your investor for the first time as a contact request will only send your email address and investment proposal to an investor.
So after sending a contact request we recommend drafting and sending a personal courtesy email to the investor that contacted you, along the lines of:
Dear <Investor Name>,
I am writing to thank you for showing interest and contacting me in regards to my investment proposal listed on Venture Giants, entitled <full investment proposal title> in which I have attached below for your convenience. (It is good practice to make the effort to attach your VG proposal in your initial email to the investor)
<Add about three lines here addressing key milestones, awards, developments etc also add any interesting developments which would appeal to an investor, revenue targets, value etc>
A sample message (Please do not copy this format exactly try to personalise it as much as possible)
Our Magazine is an online and print publication for the capital's student and we have seen our readership explode from 200 readers to 10,000 over the past year. We have been awarded Silver in the start-up awards of 2011, and our revenue has been increasingly steadily. It is a very interesting space to be involved in.
<Then carry out some research on the investor that has contacted you and write something along the lines of:>
We believe with your help and background in the industry and profile that you featured on Venture Giants you could assist us in achieving all of its goals and much more. I would be very pleased to meet with you to discuss this further (Consider: and come to an arrangement that suits all parties involved) please feel free to contact me via phone or email to discuss this further which I have enclosed in this email.
Always allow a period of 7 - 14 days for a response as it is important to understand that investors can run several companies and can be very busy.
Keep it concise and sharp to begin with, and always remain professional. We also suggest not sending your business plan in the initial email as your main aim is to instil confidence in investors by being able to clearly communicate your thoughts, ideas and vision.
It is always a good strategy to package and present and be willing to sell your business as an angel investment opportunity, so tailoring your investment summary to an investor can be a very effective strategy.
A well written email introduction with an investment summary prepared especially for the Angel Investor that contacted you that he or she will be able to peruse at their own leisure will always make a much bigger impact than simply attaching a business plan to an email and clicking send or even calling an investor directly and then talking and talking aimlessly about your business venture. This is because angel investors think very differently from entrepreneurs.
Business Angels are not used to getting up and talking like entrepreneurs are used to do doing every day, and it is important for entrepreneurs to learn how to articulate themselves in ways that business angel investors feel comfortable with and be very patient throughout the whole process and entrepreneurs must always work towards a bigger picture by taking it slowly, saying less and writing more.
If you do not hear back from the investor after a period of 14 days and after you have sent a personal email like the one listed above you are always welcome to contact Venture Giants and request for us to contact the investor on your behalf.
It is important to understand that though an investor may only have provided you with an email address etc, we have on file telephone numbers, personal and work addresses, alternative email addresses on file for ALL investors that we approve on Venture Giants and we can always find out what is going on impartially.
Please do not make the mistake of repeatedly making contact with an investor if you do not hear back from them immediately as genuine Investors will be very busy with their day to day affairs and exercising patience is a necessary skill in this regard.
OTHER GENERAL ADVICE:
The best way to stand out from the crowd is to always say less and prepare the rest in writing to let the facts of your proposal speak for themselves. Think how many times you will press the delete key and realise when you talk you will not get a second chance and this is the main reason why an investor will be hot one minute and then cold on another. One single incorrect sentence can turn an investor cold and it is important for entrepreneurs to realise how unforgiving investors really can be.
WHEN MEETING AN INVESTOR FOR THE FIRST TIME IN PERSON
YOUR FIRST MEETING:
A well written investment summary prepared especially for the Angel Investor you will be meeting is sound advice as the angel investor will be able to peruse this after the meeting, and will act as a reminder of key points that you discuss during the meeting.
When you pitch for angel investment, sell the entire business proposition to an angel investor in a format that they understand by speaking their language. It is astonishing that some entrepreneurs really believe that they do not need to pitch or create a graphical presentation to investors because they believe that they have a great product or idea and that should just speak for itself. So yes, having a full, well written, well researched business plan with financials is a must, but do not underestimate the real power in short and snappy graphics, with an investment summary (It is important for you to draft your investment summary ONLY after you have completed a full business plan.. And when you are invited to make a pitch on your business it is important to have some form of a powerpoint/graphical presentation prepared with key bullet points highlighted which structures out your whole pitch.
And a final note – though this guide is not exhaustive in its nature it is a good start to getting you investor ready. Try to enjoy the capital raising process as much as you can at this time.
There is so much to learn from each encounter with an investor and if anything all of this will hopefully bolster and boost your confidence towards turning your dream a reality.
Copyright 2013 Venture Giants Enterprises Ltd
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