After a lot of preparation and networking, you finally landed a meeting with a promising investor. Now you need to maximize your chances for success. Here are some guidelines to make the most of every encounter. These funding fit tips may seem remarkably basic, but you’d be surprised by how many entrepreneurs slip up when it comes to professionalism.
Here are a few reminders on how to put your best foot forward when it comes to communicating with potential investors.
1. Be thoughtful about email
Every email you receive from a potential investor should be answered within 24 hours or less. If you can’t get them the document or data they need within that timeframe, at least email them back to let them know when you can get them what they’ve requested.
Keep it short
Investors are busy people, so keep your missives short and to the point.
Proofread and use spellcheck
Typos can cause a potential investor to lose confidence in your professionalism—and in your business.
Say thank you
After an in-person meeting, don’t forget to thank the investors for their time.
2. Keep your promises
Be prompt and meet deadlines
Show up on time. Be ready for phone calls. Deliver proposals, financials, and other documents your potential investor asks for by the deadlines you’ve agreed to.
Don’t cancel or reschedule meetings at the last minute
If you can’t show up at when you said you would, what does that say to potential investors? That you’re unreliable. Failure to keep your promises will raise red flags.
3. Know your numbers
As part of the due diligence process, investors will crunch the numbers to evaluate if your company is a good investment. But before you get that far, most will want to see preliminary data that show your business is viable and on an upward trajectory. You should be prepared to explain your company’s progress, from historical revenue (with hard data to back it up) to future projections (with well-reasoned explanations for the assumptions you made).
Here are some useful metrics to have at your fingertips:
year-over-year net income
number of customers
customer retention rate
customer acquisition cost
customer lifetime value
projections for the next one to three years
If you can’t tell your growth story based on such metrics, or if the numbers don’t add up, you’ll quickly lose credibility—it shows that you don’t know your business nearly as well as you should.
Work with people on your team with a finance background to prepare the data you need for investors as part of an executive summary.
4. Dress for success
No one has lost investors because they dressed professionally for a meeting. So save the jeans, t-shirts, and sneakers for when you hit the bar to celebrate reaching your investment goals!
Gearing up to fundraise?
This guide explains explains the most important components of a successful fundraising strategy and how to prepare.