BLOG: Top Tips on Raising Investment During a Crisis
What investors are looking for and how you can get a foot in the door
We hosted a thought-provoking panel discussion on Raising Investment During a Crisis on 20 May 2020. Our highly esteemed panel offered some incredibly valuable insights and provided many lessons for startups and investors alike.
(A link to the recording of the webinar will be shared in due course - watch this space or sign up to our mailing list to be kept up to date).
Read on for some of the main takeaways from the event.
What investors are looking for
The panel discussed the importance of a number of factors when looking for investment opportunities:
Grit - A founder who can show that they are determined, have tenacity and can weather a storm will be the most successful. Just because COVID-19 has come along and impacted the world now, doesn’t mean something else won’t come along next year or in the future so you need to be able to demonstrate you can take on any challenge. Josh Romisher recommended the book “Grit: Why passion and resilience are the secrets to success” by Angela Duckworth as a great read.
Trust & Integrity – Do not massage your financials to make them seem better than they are or exaggerate on your wins and successes. During the due diligence process your business will be laid bare and your integrity will be damaged if you have not been honest.
Traction – With the current pandemic slowing business worldwide, the more traction you can show with your current business or a track record of previous successes the more likely you are to catch an investor’s eye. The less traction you have the harder it will be to convince investors to back you.
Experience – The panel recommended that all founders invest in a startup themselves, even if it is only £500 or £1000, which you can do via many Crowdfunding platforms. Research companies yourself and track your investments as they grow. This will put you in the shoes of an investor and better equip you with the knowledge of how you should present yourself to potential investors.
Sales - You need to be able to present well and capture the minds of the investors. If you can’t come across as convincing to investors, they will struggle to believe you will be able to sell your vision to your staff let alone your product or service to customers.
Does approaching investors cold work?
The panel also shared valuable advice on how to approach investors. Here’s a summary of their key recommendations:
Peter Cowley – Warm introductions are always better than cold so make sure you network and befriend someone who may know an investor and can make the introduction for you. Target investors carefully and ensure you will be a good fit for them as investors typically have strict criteria relating to the companies they invest in ranging from sector, to growth stage, to founding team etc.
Nicholas Russell – Think of reaching out to investors in the same way as reaching out to someone you’re interested in dating. Don’t just adopt a scatter gun approach and send the same message to hundreds of people bragging about how great you are and why they should pick you. You need to take the time to build a relationship and get to know each other first and offer them value.
Tuba Terekli – It is very difficult to receive a response to a cold approach from investors as we receive countless LinkedIn messages, Whatsapps and emails daily with pitch requests and it just isn’t feasible to look at them all let alone respond. Building a relationship first is certainly key. How would you react if someone approached you on the street and started asking for things when you didn’t even know them? Do not start conversations by saying you are looking to fundraise from the get go. Build rapport, add value and then ask.
About Centuro Global
Centuro Global offers leading business consultancy to help businesses go global. With over 20 years' experience working in legal services and management consultancy and an extensive global business network, we can help you scale your business and achieve your goals.
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