Continuing with yesterday’s post Build the Executive Summary for Fundraising, there’s another critical point: entrepreneurs should develop relationships with investors before they raise money. You don’t propose marriage on the first date, and it’s the same with investors. Developing a relationship takes time, and it isn’t always easy.
Here are a few thoughts on developing investor relationships before raising money:
- Network with local entrepreneurs and ask for warm investor intros through them
- Don’t be afraid to cold email investors and briefly share why you’d like to get together — many do take meetings without intros
- Share short-term goals with investors and state that the next time you get together you’ll share the progress (investors want to see that you get things done and follow through)
- If the meeting went well, ask to meet with the investor again in 4–6 weeks and work to create a meeting rhythm
- Don’t be pushy and know that the best investor relationships are ones that have a human connection before a financial connection
Investors invest in entrepreneurs they believe will make a great return and they have a good relationship with. Too often when raising money entrepreneurs think investors only care about making money. More often than not the human element is just as important.
What else? What are some more thoughts on developing investor relationships before raising money?