This is how you get and keep investors attention over email
Entrepreneurs should always be on the lookout for investors. With Google at your fingertips, finding the contact details of a prospective investor has never been easier. That said, simply reaching out to them is not enough as there are several others like you, seeking their attention. Follow the tips below, and you’ll soon be on your to snagging and keeping an investor. The prep 1. Hun, are you even ready? Before reaching out to investors, ascertain if you require external funding as meeting investors too early may undervalue your company. Also, you would need a business plan to demonstrate the viability and profitability of your business idea. Remember, investors are no fairy godmothers. They’re putting their money in to get money out. 2. Make a list of who you want to meet Finding an investor goes beyond them cutting you a cheque. You need to research potential investors, how much money they typically invest in new businesses, the kind of ventures they’ve supported in the past, and the sort of industry knowledge they can provide you. For instance, if you’re starting an e-commerce company, it’s a good idea to reach out to e-commerce gurus. 3. Engage with them on social media. This ties into the previous step. Follow the top dogs on Twitter, read and comment on their blogs, watch their speeches for advice. If you know what makes them tick, would inform you on how to approach them. Here’s a tip within in tip: In your email to them, reference a remark they made that gave you an aha moment. They’ll appreciate it, and you’d have gotten edge over your competitors. #Motherland Mogul Tip: Refrain from sending invitations on Facebook or LinkedIn, because people tend to swerve on the randoms. 4. If you have connections, use them! As competition is stiff, use every tools at your disposal. If someone in your circle, knows someone who knows an investor, tell them to ask their friend for an email introduction on our behalf. Email introductions increase your chances of getting a response. But first, be sure to send your pitch to your friend to ensure your message doesn’t get lost in translation. The Email 1. Identify yourself Start by telling them who you are, what you do, and how you found out about them. If you were connected through a mutual acquaintance, mention it. And remember: use the tip within the tip mentioned above to separate you from the pack. 2. Get straight to the point. Mention the name of your business, it’s aims and objectives. Then summarize your business plan and the stage of your startup. At this point, an investor will decide if your idea is worth pursuing or not, so be sure to be as clear and interesting as possible. 3. Provide additional info Include a link to your business website or attach a pitch deck or essay that elaborates the service or product your business provides. Also, state how your company is solving a teething problem and what sets it apart from its competitors. 4. Why them? Investors want to know why they’re a good match for you and your business. Consider what your business requires to reach the next growth phase, and use it to sell your point. Also, peruse the prep steps above for help. And of course, we’re not done… 5. Get the ball rolling Round up your email by mentioning you’d love to discuss in person, and provide three suitable dates. Also if you have product samples, offer to show them at the meeting. 6. Pique their curiosity a little Finally, if you’ve already met or are meeting a influential person, mention it! This would give you more credibility and make them pay attention to you. But be slick about it because name-dropping is oh tacky. Have you used any of these tips to reach out to investors? Did they help? Have you used others that have been helpful?
The smart entrepreneur’s guide to cutting startup costs
Just when you thought entrepreneurship was a walk in the park. Fantastic idea? Check. Grit? Double check. Money? Not so much. Let’s face it, getting a startup off the ground requires money and costs can quickly pile up. Often times entrepreneurs who are starting out have to operate on a tight budget until they get major funding. Raising money from investors is not an easy task either and it does take time. So how you do you make your dreams a reality with limited finances? Be realistic You may have envisioned working out of a glass-walled office on the topmost floor of the tallest building in your city. The reality however, is that you can only afford a co-working space or the vacant room in your parents’ house. If you are running an online business you don’t immediately need an office space. Avoid the nice-to-haves at all costs and focus on the most important things for your startup. Hire freelancers There are thousands of Nigerian youth willing to offer the services you need at a fraction of the cost you’ll incur hiring full-time staff members. They are flexible with their time and can be hired on an as-needed basis. They have specific sets of skills and are used to working independently so you don’t have to invest in training them. Use that to your advantage. Learn something new In order to thrive, you need to know something about everything. So before you get to the “Hire people who are smarter than you are” phase, learn some basic accounting, be your own salesman, and run your errands. One of the benefits of this is that you are eventually able to wear more than one hat with ease. Trust us, it works. Advertise through word of mouth Word of mouth has for a long time been the strongest form of marketing for startups. You need your money to provide the best product or service not to make the most noise. Got a few happy customers? Great! Ask for an in-person referral or a social media shout out. Leverage your network to get the word out to potential customers. Get as much free marketing as possible – that way you’ll know when and what to spend on advertising. Keep track of everything Always remember the books. Keep in mind that you are running on a lean budget and those little expenses easily add up. Document how much you spend on a daily basis regardless of how irrelevant it seems. Make it a habit to keep records. This will go a long way in both saving you money and supporting your pitch to potential investors.
Quick Read: Your 1 minute guide to startup financing
You already know that it takes more than a stellar business plan and an ace team for your startup to thrive. You also need financing to get your ideas off the ground. COLD. HARD. CASH. But what type of financing is available for me, you ask? Well, you have 3 options: 1. DEBT FINANCING Your company receives a loan and gives its promise to repay the loan. It includes both secured and unsecured loans, and can be long-term or short-term. Pros: You aren’t giving away any part of your business. Cons: Defaulting on the loan = signing your life away. 2. EQUITY FINANCING Your company obtains finances from potential investors, family and friends, business angels or by issuing an Initial Public Offer (IPO). Pros: You are not obligated to pay a dividend Cons: Equity finance generates capital from external investors in return for a share of the business. 3. MEZZANINE FINANCING This is a combination of both debt and equity financing. It begins as debt capital that gives the lender the rights to convert to an ownership or equity interest in the company if the loan is not paid back in time and in full. This type of financing allows the owner both debt and equity options. Pros: Allows you to get the money you need without giving up a huge chunk of your company’s ownerships…as long as you pay your debt on time. Cons: Interest rates are much higher than traditional debt financing. Want to learn more about financing and savings options for your business? Visit PAL Pensions to learn more about their unique products for young entrepreneurs.