5 Steps to Find the Right Investor for Your Business

Like it or not, money makes the world go ‘round. Businesses of all industries and sizes often rely on investors to bring home the bacon. It’s this all-important influx of cash that helps businesses scale smart over time.

But how do you find the right investor for your business? You want an investor who aligns with your corporate mission; someone who offers guidance and perspective to help you grow.

Don’t bring on the first investor you find. Instead, use these five steps to find the right partner to grow your business.

1. Do your due diligence

Investors do a lot of research before deciding to support a business. And rightfully so: the investor-business relationship is an important one. But why can’t businesses also do their due diligence before accepting an investment?

You have more than Google at your fingertips. Use tools like RateMyInvestor to read verified reviews about your potential investor. It’s so important to bring on an investor with a reputation for honesty and who’s easy to work with. You need to know you can trust your company’s future and reputation with this investor.

Don’t gamble with your hard-earned reputation. Do your due diligence to find the best investor for you.

Don’t gamble with your hard-earned reputation. Do your due diligence to find the best investor for you.

2. Know what you want

How do you actually want the relationship to work with your investor? Do you want them to be a hands-off source of cash for scaling, or an involved advisor who will help you grow?

In this way, looking for an investor is a very personal journey. When you know what you want, you can find the right investor more easily. Set your expectations from the start to find someone who aligns with your company and goals.

3. Make it mission-oriented

Knowing what you want also means you need to solidify your desired culture and working relationship.

Investors aren’t just drawn to business models or ideas. They’re drawn to who you are as an entrepreneur. They’re all about beliefs, mission, and vision. If your investor doesn’t wholeheartedly believe in your work, they aren’t right for you.

While searching for an investor, look into their background. What types of companies do they work with? What do their employees say about them? How have they worked with other businesses in the past? Make sure your potential investor lines up with your mission. Otherwise, there’s a potential for conflict and trouble.

Make sure your potential investor lines up with your mission. Otherwise, there’s a potential for conflict and trouble.

4. Build relationships

It’s not always easy to schedule a meeting with potential investors. Investors get dozens of pitches each day. What’s going to make yours stand out?

Instead of bombarding them with cold emails, use good old fashioned networking.

Business is all about building relationships and forging meaningful connections. References and in-person chats are critical to finding the right investor in an organic way. Networking events and even LinkedIn can help you build relationships more efficiently.

But, like any relationship, you have to know what you’re looking for. Target investors who are intelligent, who have funds, and who can provide resources or connections. Focus on your mission, value, and identity to build relationships naturally with potential investors. You never know when the right “Hello” will lead to funding.

5. Pitch smart

There’s an art to pitching. First of all, it’s much easier to pitch someone you know. That’s why it’s so important to build relationships before you create your pitch. Relationships increase the likelihood your pitch will be read and understood. That’s the difference between sending 50 cold emails and sending 5 highly targeted, specific emails that actually get you a meeting.

Follow investor pitching best practices once it’s time to send your pitch.

  • Know the investor: You should know the investor very well by now. Compile all of their information in one place, like a CRM. This will give you an easy overview of the investor that you can access at any time.
  • Customize your pitch: Nobody likes getting an impersonal mass email. Tailor every pitch to a specific investor. It’s going to take more time to write the pitch, but you’ll get way more responses
  • Get specific: Don’t end your pitch with, “Let’s chat sometime!” Investors are busy people; if you want to get a meeting from your pitch, offer a specific follow up. Instead of asking for a meeting, say “Are you free this Wednesday at 1 pm for me to buy you coffee?”

The bottom line

Don’t fly blind when searching for the perfect investor. These five steps will help you find a vetted investor who’s aligned to your mission and needs. The right investor can make the difference between sinking your ship and a future IPO.

Leave A Reply