Investment (Part 6) – Connecting to Investors
July 3, 2012 2 Comments
In the first blog of this series I suggested that NOW is always the right time to start looking for investment for companies that think they will need it at some point. Here are my thoughts on how to start connecting to investors.
You may be lucky enough to meet investors by chance, and attending networking events and conferences is a good way to raise awareness with investors. However, often I want to approach specialist investors that I don’t know well. In the UK I can get the attention of some investors by contacting them directly through their websites, but I think the chances of my exec summary getting any attention are much higher if I pass it to the investor through someone they know or trust. The classic examples are advisers, previous investees, and other investors, but any strong network contact will do.
This is a great reason to think about getting other people involved in your business early, as advisors, non-exec directors or a chairperson. By bringing in people with strong connections to investors, you are likely to be able to open warm conversations much more easily.
I also think the nature of the approach matters – there is a saying that “If you ask for advice, you get money. If you ask for money, you get advice”. Some of that advice may concern taking a long walk on a short pier. Posing a question like “how would I shape this business to be attractive to investors in the future” may get a more positive response than “I want your money”. You might even get some useful advice!
If you are looking to meet wih local investors, there are a number of events were it is relatively easy to them and others with an interest in young companies. Such events are generally well advertised in the start-up community. Good places to look include the events calendar at Startup Cafe and StartupDigest Scotland (a weekly e-mail event listing). Informatics Ventures have had some excellent speakers lately, and MBM Commercial run and host some good events too. The YCF Annual Conference attracts a great audience too, and is worth watching out for. In general, look out for any event where investors and/or successful entrepreneurs are speaking.
There are also events where you have the chance to put your proposition in front of investors. Some are hosted by academic institutions, for example Informatics Ventures run EIE: Engage, Invest Exploit which is open to companies from outside the University too, and Heriot Watt hosts the Converge Challenge. Pitching4Management is a commercial event connecting companies to potential management (often experienced entrepreneurs with good investor connections), and some events such as the Connect Investment Conference are specifically investment focussed. Business Forum Scotland is well attended and is a good place to pitch a company and get feedback on key questions while raising awareness.
Being seen at interesting events with interesting people is good for your general credibility, so there is little to lose by going along. A well-prepared elevator pitch that succinctly describes a company (focussing on things investors will be interested in) is vital though – hone and practice!