Image: Nic Haralambous, Keynote Speaker
Whether you are having a catch up with an investor who has been keeping track of your business or you’ve secured the opportunity to pitch for funding, the most important thing is to be prepared.
Investors will immediately be able to spot if you know your business. You need to demonstrate that you know the pressure points in your business, you know your numbers (off the top of your head, without slides and spreadsheets to assist you), and that you’re paying attention to your industry, competitors and your own business.
Nic Haralambous has raised money for three different businesses: Motribe, NicSocks.com and StudentWise. Here are his six quick-fire tips for preparing for an investor meeting:
Know your subject matter.
It’s imperative to know what your business is about and to understand the intricacies of what you do and how you do it.
Understand the competitive landscape.
Don’t go into a meeting with a potential investor thinking you’re the only company in the world doing what you do. This is very rarely true, and great investors will know it.
Be honest.
You will not have all the answers, and investors don’t expect you to. They expect you to be willing to admit you don’t know and to learn as fast as you can.
Know what you need.
Do you need funding? A network? Deal flow? A mentor? Pick something. If it is funding that you need then it’s probably a good idea to know how much you are looking to raise and what you plan to do with that money. ‘Salaries’ is not a good reason to raise money. ‘Growth’ might be, but even this is too broad and vague.
Where are you spending the money to grow? How much growth do you need? Is the growth sustainable or backed by the investment? It’s complex so don’t oversimplify this part.
Do not expect it to go well.
The chances of walking away from a first meeting with a handshake deal is probably less than 5%. The anecdotal rule of thumb is that you need to have 500 meetings to close a single deal.
You have to be able to adapt.
In Nic’s case, the intended use of the money he raised was for ecommerce growth, product expansion, marketing and hiring of a team. However, it is rare for money to be used exactly as you plan. The nature of a business is that it’s tumultuous and ever-changing, and NicSocks ended up investing in physical retail stores to complement the online brand.
Originally published on Ecommerce.co.za.
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