The fact that there are thousands of books on investment strategy means there are an infinite number of different investor mindsets. No two are probably exactly the same, but every investor holds to some basic fundamentals, first and foremost: How will this make money?
Having sat through meetings, spent time living with serial investors and enjoyed the insights from some whose picks have been nothing short of outstanding, the best starting point is to just relax.
It’s not a process. Following a set of rules for a meeting is not the best option. Learn some of the tips and apply them if certain situations and questions emerge: Don’t try get the meeting to follow a particular order. Prepare for an in-depth conversation, not a procedure.
- Trust. Your first startup experience probably means your first angel investor will have to place cash in a private bank account — if you’re lucky. Not every investor is that trusting, but if your product makes sense and you can show that the value of your company is set to increase, the trust will come. Every investor wants to get in when the price is low and some take significant risks to do that. Ensure trust. The only reason regulations and process exists is because people aren’t honest. Project and demonstrate a good reputation. It’s been said all the time, but it’s non-negotiable.
- Understanding. Knowing facts about your market is one thing. Understanding them is another. Saying there are certain unknowns that your company is dealing with is not as bad as trying to know it all. Let the honesty demonstrate an understanding. If your company relies on Facebook ads and it decides you are in the online gaming space that contravenes regulations — what is your backup plan? Demonstrate your understanding and show your adaptability.
- Convention does not dictate. Your value does. A major VC CEO does not necessarily want to see a tech entrepreneur who looks like he doubles for an investment banker. Don’t try be something you are not; there is no need to splash out on an expensive suit and R100 haircut before the meeting.
This principle applies pretty much everywhere. A last minute meeting in Miami last year led a techie and I to a major US private equity fund in t-shirts, shorts and sandals. “The tech sector I see” said the partner who joined the meeting halfway through. The idea was not a match for the fund’s investment profile, but we were given an open door to return at any time with any new ideas. Convention does not dictate, your value does.
Allow your product to speak for itself.