Although I don’t like the title — there’s nothing surefire about getting investors — in 9 Surefire Ways to Get Investors on American Express OPEN Forum author Katie Morell has a good list for anybody considering looking for investors. She’s gone to a collection of good sources and quoted them well.
About the team:
‘Do not come to me by yourself,’ says Mike Scanlin, a longtime venture capitalist and CEO of Born to Sell, an investment tool company based in Los Altos, California. ‘A professional investor is not going to invest in one guy. The team has to be relevant, so don’t just pick two buddies that don’t have experience in the area in which you are working.’
About the core concept, alias the idea:
‘You may have a great idea, but unless the marketplace wants it, you have nothing,’ [Herb Sih, managing partner of Think Big Partners] says. ‘Ask yourself, Is it scalable? Can you replicate it? Can you make the idea appear in other industries? If the answer is no, I’m not sure it is worth doing.’
‘Investors do not want to fund small, niche businesses,’ Scanlin says. ‘Because angel and VC investing is risky, they need big hits once in while to overcome the large number of total wipeouts they experience. The surest way to have a big hit is to address a $1 billion market, or larger.’
About the business plan:
Instead of approaching an investor with an 80-page business plan, Sih suggests keeping it simple and sticking to the most important parts: path to profitability, competitive intelligence, and executive summary.
‘I want to see the first year or two years—your fundamental path to profitability,’ he says. ‘I want to see an executive summary of core concepts—what problem are you solving? Do you have an understanding of the threats in the marketplace? What do your competitors look like?’
That’s three main points here. If you’re wondering how nine in the original became only three here, check out the original post for additional good advice about valuation, getting your books straight, board of advisors, and more.