Moving an investor from “not now” to “yes”

September 26, 2013

Getting a “no” from any prospective investor can be hard to take. At first glance, it’s insulting. You’ve poured heart and soul into an idea and after 10 minutes of pitching, the investor doesn’t want to hear more. For the entrepreneur who wears the success or failure of his company as a reflection of their own self-worth, “no” is devastating. To them, it’s like being told that they aren’t a valid human being and that upsets a lot of entrepreneurs.

I am embarrassed to admit that I once told one of my partners that the investor who had just walked away “didn’t get it”. A lot of investors put money into our company, but many did not, and I can’t remember a single reason why they didn’t. I don’t think I was really listening. I was pitching hard and talking a lot, but not listening. The one investor I clearly remember, however, is the one who came back about a year later and put in a substantial sum. For him, it wasn’t really a “no”, it was a “not now” and there is a big difference between the two.

Every angel investor and venture capitalist has what is called a watch list. There are many companies that are immediately forgotten, but the watch list is a place for those companies to live that haven’t quite measured up for whatever reason that have potential to move from “not now” to “yes”. Maybe they have a great technology, but no experience. Maybe they have a good team, but the product doesn’t have sustainable differentiation. Maybe the market they’re chasing is just too small. But, what if something changes? Perhaps the weak team finds a leader, or the good team furthers the innovation to the point where duplication is unlikely or patent protected. The team that keeps in touch with investors who allow occasional updates maintain a distinct advantage over those teams who throw away the business card of the less than enthusiastic investor.

Just heard a “no”? Ask why the investment will not be considered — but do not argue with them. Thank them for their candor, ask for their card, and ask if you can send updates as progress is made. Most investors appreciate this kind of contact. In later communications, address the concern — whether it is valid or not.

Investing is a process and not a speed dating event. If you develop relationships with investors, you’ve got a much better shot of closing more of them. If you start to hear the same concerns repeatedly, maybe there is something that needs to be addressed.

Investors want to see progress. Give them an avenue by which they can watch your progress without investing and they could be there for you in your next round. Do this with enough of them and you just might just get over-subscribed.

 

Crowdfunding Good, Crowdfinancing Bad

May 8, 2013
May 7, 2013/ TechVibes/-- The rise of sites like Kickstarter, Indiegogo, Rockethub, Fundageek have successfully fueled the project dreams of artists, musicians, engineers and a plethora of other masters-of-the-universe.

Got the technology but not the funds to build a neurologically-engaged pillow that comforts the sleeper while providing high intensity dreams of succeeding as emperor?

These sites allow the project owner to profile and potentially receive funding to make their dream projects a r...


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Is Your VC Strong?

May 8, 2013

CALGARY, AB, May. 4, 2013/ Troy Media/ – For a start-up that takes its fundraising seriously, it has to allow its CEO to tackle the project full-time for up to a year. The founders have studied the due diligence requirements ahead of the process and they approach the investment community in an orderly and structured fashion. The founders and CEO work hard to listen to the needs of the investors and respond with the same enthusiasm as they provide to the customers of their product or service...


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Lessons from a Goose

April 24, 2013

Lessons from a Goose

When I run, I route my path past a small lake as it is the most scenic option. Today, it hovered just around the freezing mark and as I passed the lake I noticed a Canada Goose standing on the ice of what was the middle of the lake. I wore shorts, a long-sleeved shirt and a hat to keep the chill off. After skipping past the John Mayer song on my iPod, I looked back and the goose had taken flight…towards me. Landing just behind me he started running, then shouting.


 

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