Is your company attractive to investors

How long will it take to get returns on investment? Accredited investors or high-net-worth investors focus on ROI more than what your company does.

All entrepreneurs have one thing in common. They really believe in their company and its future. Most entrepreneurs have their heads in the clouds and live in the future of prospective sales, clients and the company’s success.

How to approach potential accredited investors or angel investors.

1. Make sure you have your company registration filed and legal.

   This is essential. Registering your company and having all your legal forms ready is the most essential requirement. Your company may need a sales license and other state requirements. Ensure they are filed and ready. Your company name should be files with the state, sellers permits and EIN numbers ready. A bank account should also be set up for the company. Without these basics. Don’t go any further.

2. Get your company message right.

   Your team should all agree on what your company does and its value proposition for investors. Practice and rehearse your elevator pitch. Deliver 3 sentences that describe what problem your company addresses and how it addresses it.

3. Don’t over-hype your company

   Don’t describe your company in terms of Amazon, Google, Facebook, etc. It makes no sense when looking for an investor to discuss how you will become the next Unicorn. Talk realistically about your team and their experience. Talk about your company’s successes and your timeline for major accomplishments.

4. Respect investors’ time.

   Accredited Investors are usually inundated with companies looking to get their attention. If they seem like they are not interested, simply ask if you can follow up with them at a later time and ask for their information. There is nothing more annoying than following them around at conferences or approach them at every social occasion. You are wasting your time when you can try to source an investor who may be interested. If the investor is interested you will know.

5. Have your website and investor deck ready.

   1. Have a website, that is not made on wix or squarespace. These tools may be ok for some businesses but in general an investor wants to see something more than just a basic site.
   2. Have business cards handy. This should be a basic thing, but there are times that your business cards are in your jacket, briefcase or you didn’t get any. If you cannot hand your business care, it is better not to approach an accredited investor. They are not going to take notes to look at your website on your phone.
   3. Create an easy to see link on your site to your Public Pitch deck. If you have videos have links clear. Don’t ask the investor to watch your youtube video pitch with your phone in his face.
   4. Ensure that your pitch deck is polished and that you have all the necessary information and financial modeling investors need to make an informed decision. Hire a professional to ensure that your investor deck will deliver the most accurate and concise information for investors. Your team should also be able to discuss all this information, don’t say “Our CFO is not here but let me call and see if we can get them on the phone.”
   5. Your team should rehearse and discuss so everyone delivers the same message. Enter pitch battles or other public forums to get feedback on your pitch. This is a great way to learn what questions your team will encounter from investors and help your team deliver a consistent message.
   6. Don’t lie about who may invest. Don’t discuss other investors or lie about interested investors in your company. There is nothing worse than saying there is another investor interested to try to close the deal. Suddenly, your current prospective investor can call or verify the information. This will make you or your company look ridiculous.

Investors focus on team experience, company progress and timelines to exits

Ensure that your team can engage the investor in light conversation at first. There is no need to ask how much they are willing to invest in your company during the first discussion. If the potential investor brings it up, then that is all the better. The best course of action is to discuss how much your company is looking to raise and how much it has raised so far. This makes it easier for the investor to gauge interest in your company from other parties. Don’t lie about how much you have raised.

Marketing to investors online.

Engage a professional investor marketing company with a background and seek legal advice before you begin any investor relations or investor marketing campaign. Engaging investors will require legal and financial advice. Make sure you can get all legal documents signed and delivered quickly. You may be required to issues shares and deliver legal compliance information. This should not be done as needed. These documents and legal representation should be already agreed upon and selected by your team.

Delivering late information or not having an agreed-upon term sheet ready will delay any investments and will also look very bad.

Email marketing to investors is not a numbers game. The more emails you send the less likely you are to achieve your goals. The rule is that you engage only warm investors. Cold accredited investor leads and investor email lists are not going to work

Hire and professional investor relations or investor marketing company that understands how to get your company message in front of the right investors. Targeting accredited investors is a difficult task. Emailing cold leads will not work and can cause serious issues for your company.

Here are things that your company should consider. Engaging 30,000 cold accredited investors will not get any investment. Connecting with 100 accredited investors who can see your website, read your pitch deck and are looking for your type of company will lead to 30% of these investors actually putting money in your company in the first round or further rounds. Most accredited investors will invest $100,000 to $250,000 or more in companies when they are approached in the right way.

These are real numbers that entrepreneurs need to understand with every interaction they have. Don’t ruin your company’s potential by not delivering the right message in the right way.

If you engage multiple accredited investors who seem interested but then do not invest. This may be a message that your company is not on track and your team should look into the reason why. Simply ask the accredited investor, they may tell you. Don’t take it personally. Take it as constructive criticism.

Here are some answers that you may hear from the accredited investor who doesn’t invest:

• Company Valuation is off
• Company is not ready yet
• Your team is not experienced enough
• Your company strategy is not focused
• A team member may be toxic
• There has been no personal investment
• There are too many similar competitors
• Too hard to sell the idea to others
• Legal issues
• Terms sheets
• No track record for the company

For companies looking to attract accredited investors and get angel investors, take the advice from investors who may add more critical criticism than you are used to getting. If your team is not a team, cracks will show. If you hide anything or lie about anything, this may also be uncovered and you may face fines or legal issues form lying to investors.