Choosing an Investor: From Funding Source To Business Partner

Before you spend time looking for the appropriate investor, you need to conceptualize the fact that you are selecting a partner, not just a source of funding. As a startup or small business owner, you may have to forge a relationship with your investors. You want to work with someone who respects your product, is able to offer appropriate support, and is an identity that you and your business can relate to. Take note that any addition to your team plays with your reputation and your brand.

It’s also important to know what specific gap your investors is going to help you fill. Unless you have an angel investor that has been there since the conception of your product idea, investors want to know exactly how they are going to help you – and you also want to know this as well. Pinpoint where the gaps are and you will jumpstart your efforts in selecting the right investor.

Tips on Choosing the Right Investor

Perfect your pitch. Take time to gather the appropriate documentation and information to persuade your investor with facts. You want your pitch deck to be persuasive, factual and draw on the appropriate emotions. Investors have a short attention span and want to be immersed with your product as soon as you present your pitch deck. Have a time frame and a select few slides that truly differentiate your product from your competitors.

Choose an investor that trusts your personality and your product. There are a lot of moving parts when it comes to startups. You want to work with an investor that is flexible but still understands your main goals. You want your investors to have your back even at the most vulnerable moments.

Diversify Potential Funding Sources. There are many sources for funding like crowdfunding and angel investors. They all have their unique merits. During the seed stage of your startup, it’s important to choose investors from various industries. Like any financial folder, diversification will reinforce the chances of working with the right investor.

To learn about the myriad of factors that come into play when selecting an investor, contact us. Follow us @bigfishcapital.

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