A fatal flaw that causes entrepreneurs much heartache is expecting your presentation to investors to lead to a transaction. I realise Dragon's Den and pitching competitions give the impression entrepreneurs pitch and get funded, however, pitch entertainment is entertainment and not how early stage investment works in reality.
Pitching introduces you to an audience of investors and if you have landed on their watch list then the objective of the pitch has been achieved. What you were expecting was to go on a first date and in ten minutes have a fiancé. Early stage investors invest their own, hard-earned money.
Early stage investment is the highest risk form of investment and regardless how strong your opportunity appears at surface level, they then need to evaluate the opportunity. They also invest in entrepreneurs they have developed a relationship with. Developing a relationship takes time.
Start wooing right now.
Here’s the first three steps to woo an investor:
- Create a personal database of your network (not your company database) and share progress updates. Keep people informed.
- Take investors out for lunch, and pay for their lunch. Their time is worth more than a coffee.
- Share stories. Relationships require a value exchange. Share your learnings, insights and knowledge as well as taking theirs.