Know Your Investors
In this chapter, we characterize the different types of investors and discuss what they are looking for and what you should be looking for. When you know your investors (KYI) you will be able to:
- Increase the probability of securing funding for your entrepreneurial venture and on the best terms possible.
- Identify and select the business partners who offer the most advantages, both financial and nonfinancial.
- Ensure that your working relationship with new business partners will be the most productive and offer the best value.
KYI #1: Their Primary Objective Is to Make Money
Investors are not supporting a hobby, funding a cause, or trying to win first prize in a science fair. Entrepreneurs, by their very nature, are passionate individuals. They truly love the work they do and are apt to be altruistic and have a driving desire to pursue perfection in their creations. All of these are admirable traits, but if you do not properly manage or express these worthy values, you may hinder your dealings with prospective investors.
Prospective investors are not looking for an opportunity to financially support someone’s hobby. It is good and advisable that investors recognize that you have a passion for what you are doing. However, when interacting with prospective investors or current business partners, it is important to project your entrepreneurial venture as, first and foremost, an attractive business opportunity. Inexperienced entrepreneurs often make a ...