How to Approach Investors for Your New Company

How to Approach Investors for Your New CompanyThe landscape of new start-up companies is more crowded than ever, which means greater competition for investors’ money. Most venture capitalists receive dozens of pitches each day. They’re also becoming more selective in where they invest their money. Recently, Forbes Magazine offered suggestions to help pitch your idea to potential investors.

  • Know who your potential investors are. Do your homework. Study their portfolios and see what type of industries they invest in.
  • Create a list of investors you would like to meet with. Find out who is investing in competitor companies. Websites such as AngelList (angel.co) will give you the names of investors who are investing in companies in the same industry as your startup.
  • Go through your networks and contacts. A potential investor is more open to an introduction through a mutual associate.
  • Make sure you have perfected your introduction for those investors that you are approaching on your own. Hone your approach so it doesn’t feel like a ‘cold call’.
  • Network ‘you’. Blogging and other social media related to the industry you’re in is a great way to draw attention to yourself and attract the attention of investors.
  • Plan an introductory meeting with your potential investor. This first meeting gives you a chance to ask questions and see if you feel comfortable teaming up.
  • The process of investing usually takes place over a series of meetings. Share your company information in stages, revealing more with each meeting, but saving sensitive information for later ones. Never give out key details until after a letter of intent is signed.

If you are in the process of starting a company, consult with a knowledgeable Chicago business attorney to represent you and protect your interests with any partners or investors.