Before First Contact With An Investor
In planning your first contact with an investor:
- Develop a list of criteria that an investor in your company must have
- Research relevant investors and develop a list of candidates
- Plan your first contact with each investor
- Before your first contact with a specific investor:
- Further research the relevant investment activities of this investor candidate
- Determine if he/she will lead an investment round. If they will not lead, he/she is not the investor that you need.
- Prior to your first meeting:
- Determine whether he/she wants to see, in meeting I, a 15 minute PPT presentation or a detailed 60 minute presentation at the block diagram or other detailed level.
During First Contact With An Investor
- During first contact with an investor say (in part)
- I am contacting you because I researched you and I know we are a good fit because ….
- We need to receive investment money in six months. At this point I want to determine if you are interested in our type of business. If so; what special information would you like me to present to you as we start exploring a relationship
- At the end of the meeting; if you are interested in this investor; Ask if you may start your due diligence on him/her? Discuss your plans for Due Diligence for this specific investor. Ask if you may talk with two of his/her portfolio company CEOs?
- Note any other unique knowledge about him/her that you learned during your research. You want him/her to remember that you took the time to research him/her thoroughly
- Confirm that he/she will lead an investment round. If they will not lead, he/she is not the investor that you need.
- Point out that you understand what prior investments he/she has made in other startups in or near your area of activity and in what geographic regions. You understand how much he/she typically invests in which rounds.
- Ask if he/she is comfortable with your preferred Financial Exit.
- Confirm whether or not he/she wants a Board seat or Board Observer rights.
Remember that a key objective for you; before leaving the room; is to decide if you wish to have a second meeting with this investor.
Please See These Related Blog Posts:
- Before Raising Your First Angel-Seed Stage Investment
- Investor Strategy
- What Investors Are Right For You?
- Investor Meeting Package – Meeting I
- Investor Presentation Development
- Investor Presentation Development – Fund Raising
- Your Due Diligence on Potential Investors
- Investor Strategy
- Mistakes While Raising Startup Capital
- You may also be interested in reading the peer reviewed White Paper Startup Presentations to Angel/Seed Stage Investors and Partners: Recommendations for Best Practices. You can download it from http://carverlon.com/business-plans-wp/
- That page also provides a URL for the Angel Capital Association which chose to post this White Paper by John Gale on their website. The Angel Capital Association is the leading professional and trade association supporting the success of (US) angel investors in high-growth, early-stage ventures.