Dream financiers. You know who they are: bankers, venture capitalists, those extraordinary high-net-worth individuals called angel investors.
Knowing who they are is one thing, but getting to them is another thing altogether. In all of the murkiness of raising funds, one thing's for certain: someone is getting through. Last year, angels alone invested an estimated $16 billion in small businesses.
So how can you turn these “dream” financiers into “your” financiers? We've successfully raised tens of millions from angels for our businesses, and below is a little street wisdom we've accumulated about how to network with the money people.
Prime the pump
Imagine you're a big-time investor or lender. If a total stranger approached you for money, would you be likely to jump in? But what if you already had a months-long rapport with the entrepreneur? Or what if you were introduced by a trusted contact? Then would you give it more serious consideration? Statistics indicate that, yes, you would.
Familiarity always increases the odds of financing success. So, first off, it's all about building and maintaining relationships, especially before you actually need the money. When you're needy is the worst time to try to get funding, because you have no leverage. So think ahead and develop relationships now with the people who have the potential to provide you money in the future. Then, when you actually do need cash, you're simply explaining the next evolution of your business to your “primed” financiers.
To create this rapport, it can be as simple as emailing periodic updates to your network to keep your project top-of-mind, or penning a quick note and dropping it in the mail the “old school” way. Remember, most investors invest in projects they are excited about, and it's up to you to create and nurture that excitement.
Tap the professionals