If You Want Money, Ask for Advice
There’s an old adage when it comes to investors: “If you want money, ask for advice. If you want advice, ask for money.” The best way to set your company up for fundraising success is to build relationships with investors over time. And the best way to build relationships is to ask for advice.
Your investor bonding formula should follow this sequence: (1) update the investor about your business, (2) ask for advice on key strategic decisions, (3) declare your intention to do something the investor recommends, (4) go do it, (5) report your achievement, and (6) meet and repeat. The third and fourth steps—declare and do—are the most important. When it comes to delivering on your promises, make sure that you underpromise and overdeliver. By outperforming expectations, you’ll build a reputation for making things happen. Ideally, over time, your momentum will make your mentor/investors excited to join the party.
The more time an investor has to get to know you and understand your business, the better your chances when asking for money. While there’s no right time to meet an investor, the wrong time is at your first pitch. Start early and ask for advice.