Understanding your audience is one of the most important skills to master before pitching to investors. There are many types of investors out there, and identifying the right fit is crucial for success in funding.
To avoid any sort of liability and possible lawsuits, I suggest starting investor qualification by making sure the individual is an accredited investor. There are a number ways to qualify as an accredited investor, linked you will find the qualification guidelines.
Most entrepreneurs start their search for investors by searching for local venture capital and angel groups. These are institutional investors. An institutional investor is an accredited investor that represents or is associated with a group such as a venture fund, investment bank or an angel investment group.
Institutional money is not always the best place to start looking for funding. Here is what you should consider: Are you looking for seed funding to start your company, or capital to scale it? If you are looking for funding to start your company you might have to take a different approach with your investors, and go after mainly what we call “friends, family and fools”.
If you have a company in or near revenue, investors are looking to invest into scalability. This is a great opportunity to go after your local angel groups, early stage VC’s or maybe even VC’s.
Check out the Angel Capital Associations list of angels, or contact me today for a more focused list.
– Stephen Silver
Everyone has ideas… That said, ideas do not equate to success. Execution must be your core competency.
Every day I speak with numerous entrepreneurs who have excellent ideas for companies, products, websites, really everything you could ever imagine. But, rarely do I speak with someone who has something I’ve never seen or heard of. You must set yourself ahead of the pack, figure our how you can differentiate – possibly even disrupt the market.
I take it you’re reading this blog to figure our how to take your company to the next level. To do that you probably need funding. If you’ve successfully executed on my first two “musts” above (1. having more than an idea 2. differentiate), then you’re off to a good start. You’ve probably even raised some money, or invested yourself.
When it comes to raising early stage funding nowadays, here is the bottom line – Institutional investors are not investing into just ideas; the heyday of frivolous internet startup funding is over. (You might be asking “what do you mean by an institutional investor?” Check out my blog on investors for more information…).
Institutional investors are investing into people and / or scaling. Either you or your team has done it before, and you’re just churning out another solid vision, or you have a company that has tasted its first hint of success, and you simply need money to replicate and to scale.
I wish you the best of luck in your venture, and feel free to contact me anytime with any questions on this topic.
Make it happen — Stephen S.
Throughout my years in the venture world, I’ve always had a passion for working hands on with entrepreneurs to build their new ventures. I’ve had the great fortune of starting my carrier at Keiretsu Forum Southern California, and since then the contacts and relationships that I have developed have been the foundation for building the most rewarding career I could have dreamed of. A heartfelt thank you to everyone who has supported me throughout the years. I look forward to blogging in hopes of shedding some light on this ever changing industry, and I promise future posts won’t be as sappy as this!
Cheers — Stephen
