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|Looking For Investors? - Listening Before Pitching Your Ideas by TavershimaAyede(m): 8:05pm On Oct 12, 2022
If you have to raise money from potential investors, it will pay you to come up with a few questions to help you gauge a few things.
You’ll be trying to figure out their business interests, the kinds of returns they're looking for, the amount of control over the business they would want, and the overall vision they have for their investment portfolio.
Unfortunately you're not going to be able to extract all the information you need unless you are great at listening.
Listening is a skill behind the art of selling called "discovering value".
Before you can make an argument or a pitch for what is valuable about your investment opportunity, you have to first know what your audience finds valuable.
If you're trying to build a unicorn in the software space, but the potential investor at hand prefers to put money behind regular cash flowing opportunities, then there's no room for a marriage here and you won't be getting the capital you need.
To get a sense of what they find valuable, you not only have to interrogate them with a list of your questions, you should also be able to pay attention, listen, ask for feedback, and tease out the salient points that you should be hitting when you compile your pitch deck.
If one set of investors values a big exit when you take your unicorn public in an IPO, then your pitch deck should be on point when it comes to forecasting and the opportunities for scale in the future.
If you have a monthly cash flow kinda investor, you're better off showing figures for how cash will flow into the business and what the opportunities for profits or dividends will be.
Asking for feedback would be helpful in either case...
"so if I understand you correctly, what you're saying is that return of your capital is what's most important to you?”
“so would you be comfortable if we can show how your money would be returned with interest in three years instead of six?"
"I'm sorry but I thought you were interested in taking up more equity in return for your investment? Is there something else I'm missing sir?"
If you've been following the gist so far, then fundraising now becomes not a skill of making fancy power point slides, but a skill of listening to people intently and guiding the conversation so that you know what they find valuable and how your business proposition can help deliver them that value.
Put the odds in your favour and learn how to sell because that's the art that will make sure you properly understand where the value exchange is, and what your presentation points should be.
If you've been with me so far with the most recent posts... then good luck and happy fundraising!
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