Startups need genuine introspection over why they don’t get the expected investments. Let’s discuss why investors are not showing any interest even after productive meetings and assurances from their part, why they aren’t returning your calls or responding to your emails?
There are dozens of things-to-do and issues when starting a new business. The most obvious one is to get the expected funding without which you reach nowhere. Concepts with new ideas come in various ways, they don’t cost anything. The first challenge is the assessment of the exact capital you need to start the journey.
Once you come to a conclusion regarding the minimum initial investment you need, you can start developing the decision tree, but you need to be cautious enough to include all the basic aspects to start your business.
Investors show less interest after a high initial enthusiasm
Experts and consultants often get emails and telephones from their clients stating that even after positive meetings investors don’t come back. Startup founders get confused and fail to meet the basic needs for making the initial impression in the market.
This is a basic problem that thousands of startups around the world face in the present time. This is a common problem not only for a new startup even for comparatively older ones that need to pump more money immediately. As an entrepreneur, you must be disciplined enough to let go and show an interest only when required. Even if you think that one investor could change the face of your company.
The truth behind making the right connections with investors
Right connection matters the most. Entrepreneurs go on knowing every door and pitching to every investor without researching on the investors. These days, every startup investors have their own websites and social media accounts. You can also get genuine information from business consultants and your colleagues. You have to make the first approach with confidence. Not all investors are interested in any entrepreneurial effort. You have to keep in mind that they get tons of request emails and contacts almost every day so there remains a sheer chance of getting your email lost in a pile of requests.
Built relationships and win the trust of investors
A good relationship doesn’t start with money or you can say, money cannot be the basis of good relationship. If your targeted investors don’t know you personally, they will not show any genuine interest nor will they take chance. You need to understand that you can expect a positive response from investors when they know you and your efforts closely.
Even if you have genuine strong relationships with dozens of investors, you cannot expect that all will be interested in investing in your business. If you know a hundred good investors only ten of them or even less will turn up in times of your need. Just as investors receive tons of emails and calls, you also need to build tons of relationships to get just one investor to make fund available for your startup. It is often found that seasoned entrepreneurs get more attention from investors than new entrepreneurs because they have already built strong and mature relationships with many investors in due course.
If you want to be successful in getting a flow of investment you must concentrate on relationship building with serious and high-profile investors. Talking of money as if it is the only thing you expect from investors won’t work as these investors have lots of contacts who also want the same thing as you. They don’t have any inclination or interest in you or your business.
The reality behind billion-dollar startup investments
Your decision to raise money is packed with loads of responsibilities and commitments. No one is going to invest in your startup without reasons. They if the startup really needs money or they are just asking for investment for backup or other reasons. Investors are experienced persons their research on your requirements is going to be in-depth and as per their perception. Always remember that investors want to see that you are already into the initial phase of your project. They get more interest if you have already started earning revenue.
An investment cannot be an initiator, means, your idea is ready you need money to start. In that case, too few angles will be available by your side. Investors want to see you active and already on the way towards materializing your dream project not waiting for investment.
Anyone with a white paper and a pencil in hand can show a billion-dollar project but that is not enough to convince a genuine investor as they want to see your actions. Apart from this aspect the investors pay attention to the following aspects as well:
• Whether the product or service has any genuine prospect or not?
• Whether the entrepreneur has a clear vision of what they want to do and whether they see the business five or six years from now?
• What kinds of backup the entrepreneur has planned in case of crisis management?
• What kinds of personnel they want to recruit and what could be the operational expenses at the initial phases?
• What plans do you have for penetrating a market or creating your own market for the product or service and how far have you succeeded in this plan?
If you have correct answers to all these issues, then there is a high chance that the investors will show interest in your efforts and your idea. Ultimately it is a matter of trust and relationship that win the heart of investors. If you can show them, their benefit over investment, they’ll be more than happy to give you their money.
While there might be many reasons to think over why startups fail, I believe the post was insightful. Always remember, if you determined to build your company over a strong foundation, then you’ll succeed. This foundation usually comprises of a mix of team spirit, innovation, idea timing, execution and hard work. If you got this right and carry the will to continue through hardships, don’t give up. Sunshine is coming your way!