Raising capital for a startup isn’t easy. Many conversations are needed with various investors to eventually come to the right investor. You will often hear a “no”, do not stop because of this and search further. The following tips can help you with this:
Timing and market segment
There are several reasons for rejection that have nothing to do with your startup. Timing is one of them. An investor may have just signed a number of deals and may not want a new proposition, no matter how good the idea is. Investors also prefer to invest in fast-growing markets and market that they like. If your market segment is not interesting for them, it can be more difficult to sell your vision.
It’s about chemistry
Sometimes the reason for rejecting can be personal. Your ability to convince an investor can be a matter of the chemistry between you and the investor. Ability to make contact on a personal level is important. Your vision can be logical and even strong. But if there is no spark between you and the investor, your chances will be reduced.
There are certain characteristics that every investor naturally wants to see in an entrepreneur. They are attracted to entrepreneurs who are smart, confident and charismatic. An entrepreneur, who makes a good impression on an investor, will probably make a good impression on employees, partners and potential customers.
Remember that investors see a lot of startups passing by. They can only finance a few of them. Investors will therefore say “no” to the most startups. So talk to as many investors as possible. You can get dozens of no’s, but you only need one “yes” to complete the deal.
It’s important to know that in the beginning, when your startup has not yet reached real traction, investors mainly invest in you and your team. Show that you have a passion for your startup and what you plan to build. This helps convince investors that you are indeed “investable”
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