Preparing for a round of series A funding can take a long time. My team and I have spent the better half of the past year reading up. I’ve had to get to know hundreds of investors in order to see whether they’ll consider investing in my business. It’s been an intensive but hugely educational experience, and I’ve learned how to establish the kinds of meaningful relationships that startups depend on. Here are a few of those tactics.
The Internet has made it easy for startups to find investors unobtrusively. But there are also plenty of ways to track down potential investors offline. Here are a few places to look.
Investors tend to update their pages and profiles on social channels pretty regularly. You can follow them on whatever sites they prefer, whether it’s Facebook, Twitter, Google+, LinkedIn, or any other professional social networking sites. Their comments, tweets, and status can actually help you get a better understanding of their styles, points of view, and the sorts of businesses that interest them.
A directory like AngelList is a good place to create a profile so you can check out potential investors’ portfolios. This also gives you a chance to see who might have their eyes on you and your company.
Many investors have their own blogs where they offer commentary on the business environment that lets you get a better sense of their philosophy and values.
There are a number of startup platforms and crowdfunders that can help you keep track of what investors are doing. Some of the best places to follow potential investors include Gust, Dreamfunded, OurCrowd, EquityNet, and MicroVentures.
Many investors, including angel investors, venture capitalists, and incubators, are covered in the media. It isn’t hard to locate top investors’ comments and insights on a given subject. A simple Google search does the trick. You can also make a habit of reading stories investors write on popular websites, trade publications, and national newspapers. Sometimes you’ll come across information about investors that steers you away from doing business with them. If that turns out to be the case, it’s better to find out now than when you’re linked through a financial transaction.
It never hurts to approach investors in person, too–at conferences, social events, or wherever they’re speaking. You can remain an audience member, too, in order to watch investors in their element before you decide whether you’d like to introduce yourself.
Many investors prefer to hear more about new startups that already know them well. You can speak with other companies where an investor has provided funding and expertise. Not only can that you pinpoint what has secured an investor’s support in the past, it can also help you understand how the experience went for the startup that worked with them.
Like it or not, there’s an etiquette behind everything you do, and that also goes for how you find investors. Here are some basic dos and don’ts:
Do engage with potential investors by leaving comments on their social media profiles and blogs. It shows you’re seriously interested in what they have to say. Keep it professional and focused on what they’ve written and what strikes you about their insights. You can mention what you do in relation to what they’re discussing, or you can just ask a few questions to start a conversation.
Do know how to reach the right level of contact without getting too overbearing. I’ve personally crossed this line a couple times. There is no magic number to how many times you can comment or reach out before you get annoying, but it’s smart in general not to respond to every single social or blog entry. There’s a lot to be said for “less is more.”
Don’t become rude or offensive in your interaction with the potential investor. Be sure to take it slow. Relationship building takes time, so be patient. Like you, investors have a lot on their plates. Keep in mind that everyone can see your online behavior on social platforms, so consider how you want to be perceived.
Don’t ask for funding as soon as you make contact. Give the relationship time to develop, and use that time to get to know the investor you’re interacting with. Never ask for “follows” or “likes” in return for your own. It looks desperate.
Ultimately, diligent research is simply one of the best things you can do to find investors, partners, and potential customers. Above all, just don’t be intrusive. Find a balance between respecting potential investors’ space and actually getting the information you need.
Murray Newlands is the founder of Due, an online invoicing and time-tracking company that helps millions of freelancers and small business owners across the world get paid online. He is a member of the Young Entrepreneur Council (YEC), an invite-only organization comprised of the world’s most promising young entrepreneurs.