More times than I recall, entrepreneurs make contact and the first topic is how they can get funding. The same goes for some institutions. In fact, I even got someone on Twitter send me note indicating that they were seeking an Angel Investor. This makes me wonder what these people are thinking.
I expect to walk down the streets of New York, Miami, and San Francisco and get accosted by people wanting money to eat. These people do not know me. I understand and sympathize with their plight. They have developed a life style that causes them to need money for food. They have nothing to sell, no idea of ever speaking to me again, they are willing to hit up the next person going by and are usually looking for a few dollars. Well, except for the person I see in midtown NYC that always asks for a spare $100 dollar bill. At least he is enterprising and makes me smile!
When you ask someone for an investment, you are not begging for money like a street urchin! You are seeking a business relationship that will bring a person into the company. They may even require a Board seat. It is beyond me as to why some entrepreneurs assume the process of seeking funding does not require building a relationship or doing the required work to develop their business. To top it off, some of them are so bad that taking a first meeting is a waste of time. It only makes things worse when you provide contacts that may be helpful and you get a call months later asking for the info again because you lost it. That does not make you appear like a viable CEO or a leader. Why invest with this person? By the way, a person’s time is an investment too.
Most people worked hard to obtain what money they have. They are not ATM machines and they have personalities and feelings. The act of asking for funds or a partnership goes hand in hand with developing a trusting relationship. Recently, I saw a question in Quora wanting to know why a particular VC would not take a meeting with a tech company; “ How about they were not interested!” There must be a desire for a financial person to want to invest in what you have. This comes from learning about you, your company, your technology and seeing how it fits in their investment strategy. The investor has a desire to increase the value of their fund by strategic investing. If you are not a fit, it can be for a host of reasons.
Simply because you started a company does not guarantee that you will ever find the funds to run it. You have to work smart and hard. Maybe the money will come your way if you do work hard. As an interesting note, I spoke with a few institutions that want lectures on finding money. Great thought but it is the last topic to address for a startup, not the first. The planning, construct of the company, the markets and many other topics should come first. How can someone ever seriously consider giving funds to a person that has nothing to sell?
Every university faculty knows how to find grant funding. This is possible in startups and that even requires a lot of preparation. When most individuals invest their own funds, they hopefully spend significant time understanding the investment. Not doing this creates too much risk for that investment.
Summary: If you just started a company, do your work. Then approach possible investors. Why blow your chances with real investors due to complete lack of preparation. In a sense, it is like the saying, “if you do the crime, you need to do the time.” Stop thinking people owe you and start thinking I have to work harder every day to do the right things. If I do, maybe they will invest in me!
Taffy Williams is the author of: Think Agile: How Smart Entrepreneurs Adapt in Order to Succeed to via Amazon