Raising funds is one thing but deciding that the investor is right for your brand is another. When you choose to find someone to support your business, it’s not just about facts and figures; it’s a way more than that. You have to keep tons of things into consideration while testing that the investor is the right fit for your brands such as communication, reputation, commitment, and whatnot.
Checking on the investor is the most crucial part as a right investor can help you in clarifying your visions, grow your business, and enhance your brands’ reputation. At the same time, a wrong one can hamper your reputation, undermine your growth, and destroy your dream and turn them into nightmares.
Don’t be impatient while you are in the process of finding an investor because, just like you, investors are also looking for the right opportunities to invest in. Entrepreneurs need to be very careful about who they allow investing in. Please do your homework well, know about their background, online reputation before making any decision. Just don’t be in a hurry while taking an important step.
Here are some tips and questions that you can ask yourself before giving a green signal to an investor.
1.You’re Choosing Person, Not Money
Recognize that you are choosing a partner, not money. People are differentiable, and money isn’t. You would like to travel in with this mindset and picture yourself spending significant time with this person. You need to feel a level of mutual connection and mutual respect?
On the other side, ask yourself a question called ‘the airport question.’ Imagine you are grounded at the airport, and your flight is delayed by three hours. If you saw this investor within the airport, would you walk straight to them and say, ‘Great, we get to spend a while together!’ or would you go away and hope they didn’t notice you? If you can’t emphatically say it’s the first one, then they aren’t the proper fit.
2. Determine Ability to Fill In Value-Gaps
Figure out the precise value-gaps that an investor can help fill and determine his or her ability to try to do so. Beyond the cash, what are the gaps that are slowing you down towards success? Are there critical team members at the investment company which will help fill them? Does the investor understand your business model and industry?
It sounds obvious but does a check on their track-record mainly that their area of operation is similar to your business model and the industry or not. Entrepreneurs should consider, “How connected and smart the investors in the area of you are trying to grow?”
3. Go For an Active Investor
Some venture capitalists go for investment meetings even when they lack funds. While you find an investor make sure that you figure out that the investor has invested within the last three months. Don’t overlook this step.
There is an honest chance that the investor who has not invested in any business within that period doesn’t have enough funds to take put in your industry.
4. Do They Have An Optimistic View?
Bringing a spirit of optimism to a business investment takes you toward nurturing the conditions necessary to ascertain a profitable outcome. Communicating confidence in business encourages key stakeholders and strengthened them against an environment of unpredictable change. Having a positive outlook toward an emerging startup is incredibly essential.
An experienced investor is aware of rough patches and setbacks as a part of the method and respond patiently and support instead of negativity and criticism. This level of support is often the difference between startups sinking or swimming.
Are you the one who mostly initiates the conversation? When you text him something time-sensitive but not critical, do they respond quickly and are comfortable with this communication stream. By this, you get to know that they’re interested and wish to have a more ‘direct’ conversation or not.
You need to figure out how involved in your business. Do they tend to be hands-on, meddlesome, distant, or content to remain out of the way?
6. Their Way of Treating Your Team
If an investor wants to play a positive role in your company, you’ll like them to function as a team player. Their approach to communication, conflict, and collaboration are critical indicators of whether they’ll mix with your team or not. You’ll also need a chance to measure their degree of social awareness and emotional intelligence.
Once you find an investor, the subsequent step is to convince them to take a position. Your financial partner can help you in bringing a winning combination of industry experience and open-mindedness with a consistent level of involvement and shared vision. They’ll even be a team player with a solid reputation, an optimistic outlook, and have a talent for bringing out the simplest in you and your business. Choosing the proper investor won’t only help your business but will make sure the journey to success is rewarding and worthwhile.