First-time entrepreneurs often find that an endless stream of important decisions is an unavoidable component of this line of work. An entrepreneur’s career begins with the defining choice to go into business for him- or herself. From there, the important decision-making doesn’t stop until the day the entrepreneur decides to leave the company he or she built from the ground up.
Somewhere between these two points, however, many entrepreneurs consider whether or not to seek funding from outside investors to take their startup’s operations to levels that would otherwise be impossible. Unfortunately, making the tough decision about whether or not to take on investors is the easiest part of the process. The difficult part is earning the interest of these powerful professionals who have likely sat through countless meetings with entrepreneurs from virtually every industry.
It’s important for entrepreneurs to know that a great product alone will not guarantee outside investment. The best investors know that the founder of a company is just as important as what the firm is selling, and they are not easily impressed.
If you want to secure big investments that amplify your company’s reach and jumpstart its growth, you as a founder need to stand out and capture the genuine interest of the investors you speak with. These four habits can help you do exactly that.
1. Demonstrate Self-Awareness
Investors worth having understand that self-awareness is a key tenet of good leadership. Develop a well-rounded understanding of your strengths and weaknesses as a leader as well as the strengths and weaknesses of your company. You’re less likely to be blindsided when problems arise and more likely to make informed strategic decisions.
Demonstrating self-awareness during a pitch meeting involves staying calm throughout the exchange and answering questions without getting defensive. Show that you are a self-aware founder.
Speak thoughtfully and honestly about the challenges your company faces and humbly about the accomplishments that you have already made. Self-awareness can also be demonstrated through open-mindedness and willingness to hear feedback.
Overall, founders who show this quality pique the interest of investors because it’s a good indicator that a founder is reliable, committed, and unlikely to let pride get in the way of the company’s success.
2. Be Blunt about Your Funding Needs
Deciding how large of an investment to ask for is yet another important choice that every entrepreneur who is courting financial backers will have to make. There are a number of factors to consider during the process. These include the type of investor you’re hoping to work with, the stage that your company is at, whether you’re seeking a single or staged delivery, and the implied ownership cost.
Though it depends on the specifics of the situation, the general rule of thumb is to ask for the minimum amount necessary to execute your plans for the company, plus the addition of a small buffer amount. As an entrepreneur, the best thing that you can do once you and your team have arrived at this number is to be completely upfront about how much you need and exactly why you need it.
It’s normal to be nervous about asking for too much, but being shy about what you need or too intimidated to ask for a specific amount could make investors feel like you aren’t being transparent about the state of your company. Stand out from other startup founders by being straightforward about your needs, but always have the data to show exactly why you need that specific amount.
3. Do Your Homework
The kind of startup that eventually considers bringing on outside investment is usually the product of a well-developed team with a diverse set of skills. However, investors are more likely to be impressed by a founder who knows a little bit of everything about what it takes to make his or her company work.
You may not have a background in engineering, IT, marketing, data analyzation, or communications. Ultimately, however, if these areas of business are part of what allows your company to run, you need to be familiar with them when you meet with investors.
That isn’t to say that you need to get a full education in areas outside of your own expertise. You do need to be familiar enough with the different components of your business operations that you can explain them simply and clearly to investors without the assistance of your team members.
The entrepreneurs who are most likely to impress investors tend to be jack-of-all-trades types. They show up to meetings with potential finance partners with their homework done. You have to know the ins and outs of your company’s operations and be able to talk confidently about each aspect of it. This is the case even in highly technical areas outside of your typical realm of knowledge.
4. Know How to Tell a Good Story
Finally, you’re more likely to earn the admiration and interest of potential investors if you are a talented storyteller. Even more than your past professional experience as a startup founder or your company’s numbers, the story you tell about what your vision is and how you’re going to get there has a powerful effect on whether or not you earn financial support.
There’s no outright “correct” way to frame the story you tell potential investors. However, the two most important elements of any good entrepreneurial tale are passion and vision. Use your story as an opportunity to communicate your values, explain the conflict your company hopes to solve, and pointedly explain how you plan to do so.
When all else fails, be authentic. If your investors feel inspired by what you have to say about what your company does and why it matters, they’ll feel more confident about your ability to inspire your own team and earn the appreciation of your customers.