by Martijn Lentz
Meeting an investor for the first time? This is your moment to shine! Why should they invest in you? What do they need to hear? Get some tips here.
An investor has invited you for a cup of coffee. That’s a great signal, you’ve passed the first hurdle. But you’re not there yet. The investor uses the first personal meeting to make up his mind about you and your business. It’s the moment to prove what you are worth. Make sure you give enough insights in yourself, your growth strategy and the exit, and you might well find your future investor.
You and your founding team
When you're starting a business venture, the founding team shapes everything from the product to the brand, the voice and culture of your company. Your team is key to success. Explain why you have the power to grow your business. Show how committed and motivated you are to making your business succeed. Have answers ready for tough questions on your personal strengths and weaknesses. Don’t embellish (too much); don't pretend to be a different person from who you are (leave the cape at home).
Explain clearly how you will use the money you’re asking for. Why it is necessary to invest to accelerate the growth. For example: “I am looking for €100,000 to invest in online marketing, sales and distribution, which will double the turnover in the next 2 years”. Your numbers have already been checked out. Therefore seek evidence from recognised sources, and spend time with real customers and industry experts, to quantify the investment opportunity you are offering.
Last but not least is the exit. Equity investors step in for a limited period of time, between 3 to 7 years. So make sure you can explain when and how the investor can cash out on his investment. After all, to make a profit he needs to sell his shares in your company at a higher value. In the ideal situation an investor can reap the benefits of his investment when the company is sold to the market leader or via IPO. In those cases, there is a high premium that will lead to great return on investment (ROI).
So here you have it. Make sure you give enough insights in yourself, your growth strategy and the exit, and you might well find your future investor.
Martijn Lentz is a KVK Entrepreneurial Financing Expert. During Amsterdam Capital Week 2018, he will post a short daily blog on ‘How to raise capital in five days’. Do you have any questions? Contact KVK’s Startup Information Desk 00 31 88 5852222, or e-mail firstname.lastname@example.org. You can find Dutch info on KVK.nl/startups.