How to Introduce Yourself to Angel Investors and/or VCs

Maybe it is not news to you, but it certainly was news to me, when I read it. And I was pretty amused too; that a certain western country was advertising that one of the ways that you could immigrate to their country was to be an entrepreneur. And to qualify for immigration to that country, one simply had to get a letter of support from an investor organization in their country. You can imagine the importance being an Entrepreneur in today’s world!

Note of advice to budding entrepreneurs while reading this article: Please highlight and right click, on all the italicized and bold words / phrases in my article to do further web search. All the best finding investors!

Angel or a VC, investors have options to invest. If you want to know how to get introduced to them, you may start with some simple questions –

  • Who are they?
  • What do they want?
  • Where can I find them?
  • When is the right time to meet them?
  • Why would they want to meet me?

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Who Are Investors?

Investors fall under many categories. A sample list of these categories are – ‘Friends, family and fools’, Banks, certain government agencies (for grants), loan sharks (avoid!), HNIs, (or High Net-worth Individuals), Angel Investors, strategic investors, VCs, Private Equity Funds, the public (IPO), and other financial institutions.

When getting introduced to an Investor, have a well prepared and memorized script (a brief one minute pitch) of introduction to yourself and to your business. The only objective at the time introduction with a potential investor is to be invited for the next meeting! Be focused on that. And know that investors appreciate the importance of cutting to the chase (meaning, get to the real point, quickly). Tip: If you get called for a follow-up meeting, and if you haven’t already prepared, work like hell to have details of your projected cash flows, and not just the projected P&L statement. Investors like to see that you are cash conscious and believe in its efficient use.
Get familiarized with the jargons of investment world, such as EBITDA, Dilution, pre & post money valuations, Burn Rate, ROI, IRR, Drag Along, Tag Along, Due Diligence, etc.

Who Are Investors?

The yellow pages in most telephone directories don’t list the Angel Investors and the VCs. Depending on the type and the stage of your business, you may have to go about building your own yellow pages.

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The overall list of sources where you may find an investor is far too long to accommodate here. Once you have a long enough investor’s list with their contact information, connect with them. If possible, write to them directly or visit their websites and submit your business plan.
Once again, remember that when you meet or write to investors for the first time, you want to communicate just enough to be invited for the next meeting! It is at the next meeting that you may give details.

When Is The Right Time To Meet Investors?

I have taken a lot of inspiration from this phrase – Beauty is in the eye of the beholder! Get introduced to the right investors (beholders) and speak to them only when you are ready for them.
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  • if you are at the stage of building a Prototype of a product, or are at the stage of discovering a drug or a formulation, you might want to consider approaching some government agencies to get investments (grants). For grants, say for a science and technology based business, you might want to start with going though the website of MoST (ministry of science and technology) and look for the right department for right type of grant.
  • if you are at the stage of Commercialization of that earlier mentioned prototype, and you are Bear in mind, that many Investors are themselves experienced entrepreneurs. So keep a look out for such successful entrepreneurs in the news.

 

Amitabh Shrivastava

Member IAN,  &

CEO at CSIR Tech

What Do Investors Want?

This is not as difficult as knowing what do women want (just kidding!). What normally does not happen is that you get an investor and then you start to build out your business plan. So, first you should build your business plan, which must include the key team, the Market (growth and ability to scale), the Product (or positioning), the debt/equity financing plan, the execution plan, the revenue realization plan, and amongst other things – the exit plan for the investors.

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In a vibrant entrepreneurial ecosystem like India’s, you must know that just as you want to get introduced to the investors, the investors themselves are looking for you! Try the following:

  • Go to those colleagues or seniors, who have, in past, raised money for their business.
  • Do an internet search to get the names of Angels and VCs.
  • Put a Google Alert on some of these names from your list. That way you will know, on a daily basis, what these Angels, VCs, etc are in the news for.
  • Use business social networks, such as LinkedIn, etc., to build your network with these investors.
  • Find Entrepreneurship Accelerators and Incubators, and get them to invite you to events where investors come to meet entrepreneurs.
  • Join or subscribe to forums like SMB Connect, Open Coffee Clubs, TiE, Nasscom, YourStory, VC Circle, ProductNation.in and organizations and websites similar to them.

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starting to see some traction,

then you might want meet an

Angel Investor.

  • If you are at the stage of scaling up your operations, you might look for VCs having the relevant interest.

When you meet an investor too early then you risk being undervalued, and in fact you are likely to be considered too risky to invest in. Quite obviously you want to meet them when you don’t sound too desperate either.

Why would Investors want to meet me?

In my view, investors want clarity of return on their investment! It is as simple as that. One simple reason why investors may want to meet you is because they are lead to believe that you have figured out how to go about giving them the returns on their investment. By and large investors bet on the Entrepreneur, while deciding to invest in a start-up. They want you to frame the real-life problem that you are trying to solve.
As an entrepreneur, you must display the right traits to attract an investor. Some of these traits include – passion, ability to learn (mentor-ability), decisiveness, visualization of future, etc. So for an effective introduction you must demonstrate that you have the aura, along with the depth, to provide them clarity on how you will be successful in providing them the return.
This is the substance, the rest is all form! I leave you to ponder much more over why investors would want to meet and do business with you. Maybe I will write about it some other time.

(The author, Amitabh Shrivastava, is a member of Indian Angel Network, and is currently the CEO of CSIR-Tech Pvt Ltd. Some images credited to Clip Art)

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