New Twists to Old Investor Recruiting Strategies
By: Vlad Moldavskiy 03/07/2015
When looking for investors, think about how you can mix tradition with technology. New technology and media networks work well for connecting entrepreneurs with investors all around the world. However, technology can only take you so far in securing an investment--you still need a great idea and business plan first. If you're looking to impress future investors, consider these new twists to old recruiting strategies:
The Elevator Pitch
The elevator pitch is the first of the tried and true methods of investment recruitment. Generally between 30 seconds and two minutes, the elevator pitch assumes that you have a very brief amount of time in which to speak to your captive audience. In the amount of time that it takes to go from floor to floor, you better talk fast and make it count. One of the best tools for your pitch is to use no tools at all. Start by creating your pitch on note cards. Then, once you have a solid pitch memorized, you can add technological flash.
Technology has changed our elevator into a webcam. Investor networks like Worldwide Investor Network run online pitch and presentation conferences where qualified investors can hear prerecorded short pitches and decide if they want more information. This new online version of the elevator pitch requires you to understand some basics of camerawork, online video platforms like YouTube and file sharing. However, don't be distracted by all the opportunities technology presents. You still want your words to stand center stage, and all of the technology in the world will not make a bad idea into a good one.
The Big Presentation
If your elevator pitch works, your potential investor will want more information, usually in the form of a presentation. For this big meeting, you will want to have two types of business plans ready. One will be a full plan and the other will be an abbreviated plan. Some people, like accountants and lawyers, like to have every piece of information at their fingertips. But others may want you to cut to the chase. For example, a music mogul cares little about your line item budget and will probably focus on the total investment and return instead. There are a lot of good software programs, such as Business Plan Pro, that can help. If you get stuck, contact the SBA because they offer business planning classes.
A common misconception is that investors give their money to good ideas. The reality is that they invest in things that will last. This means you need to prove your sustainability as a business when soliciting investors. The best way to do that is to prove that you have a financial backbone. Accounts receivable with long terms, heavy bad debt ratios or issues with cash flow can kill a deal. Long before you meet with an investor, take a look at your financials with a funderâ€™s eye. Use an all-in-one software program like Sage One to look at all of your finances. Then, you can automate reports and track what money is coming in and going out. Having these reports and financial statements ready will help you impress investors when the time comes.
Technology has increased the number of opportunities for entrepreneurs and small businesses to connect with investors. However, technology will never be able to make up for a great idea, a thorough business plan and solid financials.