Tips for finding your dream investor
25 January 2021
In love, and in entrepreneurship, it’s a numbers game. And traditionally, you’ve had to kiss a lot of frogs. Even with a platform like Qodeo acting as matchmaker, by reviewing your business attributes and recommending and grading potential matches, there’s still an art to identifying your perfect partner and building that long-term relationship.
While most investor/entrepreneur partnerships last longer than the average marriage, there’s work to be done laying the foundations for a strong, smooth-running relationship. These 6 tips will help entrepreneurs secure the right venture capital or private equity investor at the right time, faster and more efficiently.
- Where to start?
Finding your perfect funding match is like going to a party (pre-COVID-19) and not knowing anyone, let alone who’s in the market or what they’re looking for. It’s a random, needle-in-a-haystack kind of exercise and it can waste a lot of time. Not only that, if you do happen to meet a likely venture capital/private equity (VC/PE) professional, you probably won’t speak their language, or understand their metrics for onboarding and selection.
The key is to know which pool to fish in. And to also be aware that just because a firm has funded a similar business to yours in the past, doesn’t mean you’re the right fit for them. In fact, that might raise conflict issues (known to some as “Chinese Walls”) and stymie your chances – a bit like trying to get a date with someone who’s already married!
The database behind the Qodeo platform has more than 1,900 leading VCs, PE firms globally, and will shortly be adding angel investors and Family Offices. This rich mix of potential investors has been pre-vetted and run through Qodeo’s proprietary algorithms, which means that matches are genuine matches, and your potential VC/PE partner is looking at you seriously (not just a casual flirtation).
(Note also, entrepreneurs can proactively scan the market using the Qodeo Search tool. And our new Concierge tool helps enhance your matchability/investment readiness – so you’ll always meet your date looking your finest!)
- Keep your profile up to date
Human beings change over time with different needs and aspirations, and so do businesses. Over the life of your business, your mission and even the shape of your business will change. To ensure you’re still attracting the right investors, you need to update critical details like profit, number of employees and valuation. At the same time, VC/PE firms need to update when they’ve raised or deployed new funds.
Every time new data is entered on Qodeo, it spins the whole database so new matches can happen. Using this live ecosystem, you might find that a venture firm that’s not applicable to you now, might be tomorrow if your business attributes change. Just like a dating app, people come on – and off, all the time!
- Communicate clearly, don’t bombard
Entrepreneurs who subscribe to the Qodeo platform are notified about their matches automatically. From there, your matched investor can communicate directly with you via the platform. This initial series of getting-to-know-you dates is the opportunity to communicate the mission of your business, the problems you’re solving for your customers honestly, using plain language. No bluffing – full transparency is best.
Try not to bombard your investor with a confetti of complex information. The venture market is overwhelming for investors and entrepreneurs alike; you don’t want to lose them at this early stage. (Save the confetti for the wedding.) And as in real life, don’t play desperate or stalk your funding partner – that never ends well.
- Ask the right questions
Often an entrepreneur is only thinking about what they want to say, and what they need from their VC or PE investor, but it’s always a two-way street. What are your investor’s goals? Where are they heading or what are the demands their own investors are making? It’s often not realized that VC/PE firms themselves have to raise funds – usually from pension funds and family offices. How is their portfolio faring in current financial markets? Getting to know your potential partner through their Qodeo profile, listening to them and deriving the right information is just as important as talking yourself up; and it’s the only way to know if it’s a truly perfect match. And when you’re talking deal terms, make sure they’re fair, and that your investor is adding value. All investor/entrepreneur alliances need to be mutual and intelligent because unbalanced relationships tend to fall apart in the longer-term.
- Make connections for your future
After meeting a potential match, it may become apparent that the union isn’t going further than the first few dates, even if they’re great dates. Sometimes your business location isn’t right, or you’re in the wrong sector, or you’re at a stage or scale that doesn’t suit the investor.
Remember that someone who isn’t Mr or Mrs Right for you right now, may have a role to play in the success of your business in the future – be it referring you to another investor, giving advice, feedback and ideas or introducing you to new customers.
As in dating. it’s all about timing. Qodeo curates best-fit funding partners for your funding journey – at the time when you’re most ready. Just like investors can create ‘watchlists’ on entrepreneurs, you can do the same with potential investors, profiling ‘cool’ or ‘warm’ matches on Qodeo before they become ‘hot’, which is the time for you to make your approach.
Don’t miss out on opportunities outside your traditional network – setting up a profile on Qodeo is quick and easy and can be done in just 5 minutes. Subscription to the Qodeo platform costs 9.95 per month (in most currencies); or 19.95 per month for the premium Concierge service, which helps you improve your profile to attract the right investor even faster, including giving you access to regional reports. Sign up to Qodeo to find your perfect match, fast.Sign up for Qodeo