Knowing how to connect with investors is about knowing where to look, who to look for, and how to maximize your first introduction. It's crucial to keep investors engaged from initial engagement all the way until you can pitch your idea. This isn’t always such a difficult task as long as you’re talking to the right person and you have a clear ask on what your idea needs in terms of financing.
We've compiled advice on all of this coming up, as well as some best practices that should have you well-versed on how to meet with investors. Let's walk through how to carry the relationship from inception through to the lasting business arrangements you’re looking for.
Identify the Investors you Need
Before you go out and start waving your deal around in public you’ll need to know your audience. This will be a key part of the networking strategy that we’ll talk about later, but it’s worth covering at the beginning because there are several different investor profiles. Different types of investors will be found in different places, so knowing who you’re looking for will inform where to search.
Here’s a rough breakdown of the types of investors you might need:
These are the people who will take a huge risk on an idea that has very little else behind it. The very first stage of your company might need funds to get from a place of imagination to a genuine prototype startup, and pre-seed investors are the place to look for this.
They’re usually people who know you and like you since the investment risk is likely to be too high for a stranger to take on. Look to your family and friends, and consider this option if you need up to tens of thousands to get started. Sometimes, pre-seed funds can go up into the hundreds of thousands, but this depends on whom you know, and probably on your previous experience too.
This is another early-stage option, often before most other investors are ready to take a chance. Angel investors are individuals with capital behind them who are likely to get on board with ideas that resonate with them. Funds from Angels can range from a few thousand to about a million and can come with some industry expertise too.
These investments are usually made partially from a financial standpoint, and partially from an emotional one, so picking the right person here can come with tremendous benefits to your network and industry education. Finding someone with the right passion for the role can bring a lot more than just capital to your project.
Seed funds are a significant step up from pre-seed, and usually, you’ll be eligible for this once your company has gained some traction. There are both individuals and funding firms who may be interested in supplying this funding level, as long as your paperwork is in order and you have some kind of proof of concept. Once this is all ready, you’ll be able to apply for the next round of funding, which could be a substantial injection of capital that can facilitate some very rapid growth.
You’ll likely be able to ask for anything up to around five million dollars. On average, seed fund rounds cover about $2.2 million, and in most cases, this should be spent on rapidly and efficiently gaining market share.
Venture Capitalist (VC)
For later rounds of investment, many companies will pitch to of VC funds. These can range from micro-funds to injections of capital into the billions, so they’re looking for the highest growth potential before investing. Venture capital can be a significant boost to a young company, and it can come from a firm or an individual.
Traditionally, these were the high-risk investors, but in 2023, VC often comes from a much more conservative and cautious place. These firms are looking for outsized ('venture scale') returns so your company must have all its bases covered and tell a compelling story to receive VC funding. Usually, these firms spend less than 2h per week on any given company, so they should not be relied upon for mentorship.
These are the major categories of investors, and it’s worth remembering that each one will probably want a stake in the company in the form of an equity share. This percentage will vary depending on the amount of money that’s being invested, and how much promise your company shows. Now, let’s look at how you might come across some of them.
How to Meet With Investors, Online and Offline
Nowadays there are so many available options for meeting investors. Siteshave been designed specifically for this purpose and are only a brief Google search away. Still, there are physical forums for the same, and they shouldn’t be ignored. A physical presence is more powerful than an online one, and though it uses more resources, should always be prioritized where possible.
Consider the online approach to be one that supplements and supports an in-person networking strategy. While both are capable of being their own discipline, they work best when used in conjunction with one another. This way, you get the benefits of the rapid communication and huge reach that comes with online networking, and the huge benefits to personal relationships that come with showing up and being physically present.
For the most straightforward and physical approach to meeting investors, there are plenty of startup meetings and events designed specifically for this purpose. Choosing an event nearby could give you the best audience for your project, particularly if you’re looking for angel investors, as they typically like to put money into local projects.
Networking events can be set up for any stage of investment, and for any sector, so look out for the right one on meetup websites, or at your local chamber of commerce for news on the next event near you.
Online investor platforms
The investors you’re looking for may come from the virtual world. There are several sites specially designed for linking investors to founders, and these can sometimes be the fastest and most effective way to find the right people to help you.
Many of these platforms have a social aspect to them too, in which founders can interact with one another and learn from each other. Each platform will have its own way of getting paid, and some will take a subscription fee, while others will take a percentage of investments that are made.
One of the best ways to get hooked up with an investor is to be directly referred to them. This means you’ll benefit tremendously from having a diverse and robust network. Following a networking strategy will take you a long way in all aspects of business, so get out there and start making connections.
When you find people in your target industry, start looking toward business owners and other candidates for angel investors, and see what you can find. Don’t forget that you don’t need to interact with them directly at first. Build a network around them, and you may find that you get a powerful introduction once you make your intentions known.
Note: Networking should follow a thoughtful structure, or you’ll end up wasting a lot of time in the wrong places. Whether online or offline, design a networking strategy based on your specific needs and approach it smartly. We’ll go over some of the ways to do this shortly.
Both specific and non-specific places on social media can be used to find investors. LinkedIn has a more business focus and can be a great place to start, but more generalized social media like Facebook also provide spaces for investors to connect with founders.
The trick to using social media is to be active, and contribute. Share your ideas, make your presence known, and try to connect with people at every opportunity. Consider this approach as a subset of networking, and follow those similar principles.
In some cases, you’ll get lucky, be offered an opportunity to pitch your idea and get started quickly. This isn’t usually the case, though, and in many other cases, you’ll have to work for that opportunity.
The Next Steps: How to Connect With Investors
If you’re hunting for investors using a networking strategy, once you’ve found your prospective investor, you’ll want to follow a series of steps that lead from your initial introduction to your presenting your pitch for your investor. These can be separated into four distinct phases:
Plan – Before you even reach out, set some targets, cultivate an idea of the ideal candidate you’re looking for, and from there, you’ll be able to choose your best networking strategies. Get your materials ready, too. If you’re going out into the world, you’ll want printed contact details on a business card. Depending on your targets, it’s probably worth carrying around a summary document of what you do, that you can hand to interested parties. Lastly, know your pitch, and have specific details of your company fresh in your mind so you can answer questions about it.
Engage – This covers your initial moment of reaching out. Some key tips here are not to get carried away with too much redundant information but have everything prepared to answer questions. Introduce yourself, and display your characteristics and your philosophy, but don’t worry too much about going into detail unless specifically asked.
Make sure not to pile on the pressure; this is a marathon, not a sprint! Begin to cultivate a connection at this stage.
Nurture – After your first meeting, it’s important not to let this connection go cold. It needs to be maintained and nurtured to higher levels. This is where your contact management strength comes in. By using contact relationships management software like Dex, you can keep your network fresh and engaged.
Dex helps you nurture these relationships by allowing you to integrate your social media, keep all your communications in one place, and pick up conversations where you left off. You can also set reminders to reach out at strategic times, whether they’re birthdays, special occasions, or just planned check-in intervals.
By nurturing your contacts in this way, you’ll be building genuine connections and be smoothing the transition to get your pitch out there.
Pitch – Now it’s time to request a meeting. If you’ve put the groundwork in, you’ll have a receptive audience, and it’s important that you go in prepared. Have all your paperwork in order, have your pitch up to date and well-rehearsed, and make sure not to oversell.
Your investor will be looking for honesty and accuracy over hype and ego, so keep it humble, and stick to the important parts.
This is one of the most natural and engaging methods of acquiring investment, but of course, there are others. Some online approaches may simply need you to put up a portfolio or profile and people will come to you. However, the power of a network, even outside of hunting for investors, can’t be understated, and you’ll find it may save you time, in the long run, to put the effort into building one now.
As one of the best tools for finding investors, it’s a good idea to know some networking best practices too. These work both online and offline and can help you form life-long connections with the people who are most able to help you.
Have a Strategy for How to Network with Investors
Networking works similarly in the physical world as it does in the virtual world. Aside from a few crucial physical meetings here and there, your network will be mostly built via online communication anyway, so the best practices are applicable for both. Here are some suggestions to maximize your chances of drawing investors into your network.
1. When looking to connect with investors, figure out where to look. As we covered, there are specific sites for this, so browse through a few and see which ones suit your idea. Other options for where to look include your local government agency responsible for economic development. They can offer relevant advice on your financing options and may provide you with network leads too.
2. Look for the right people. It’s going to be a waste of time if the person you’re meeting with doesn’t invest in your sector or location. Start developing some filter questions, or if you’re networking online, follow some of their investment or comment histories to figure out if they’re a viable candidate in the first place.
3. If you have a contact with a lead you’re interested in, ask them to hook you up. But do your homework first! Make sure you know exactly why this is the person you want to talk to and try to have better motivations than simply their wallet. When you make the request, state your reasons, so that your target contact knows that you’re coming in prepared. The more you know about them, the more impressed they will be with your diligence.
4. Maintain your online presence. This should be part of your networking preparedness. Make sure you have a tidy LinkedIn profile, and that your social media is conducive to receiving investors in general. Organize your content, and if you have a brand theme already, make sure it’s consistent across your platforms. You should present a reliable and respectable front when your contacts look you up!
Keeping your online presence valid and active is part of the slow-burn strategy. Having a wealth of content behind you by the time someone comes to check you out is a very powerful tool, so consider contributing something every week just to build up a useful backing.
5. Be genuine in your connections. Nothing is more appealing than authenticity. Your investors may be looking to form a very long relationship with you, so it’s critical to get off on the right foot. Don’t boast, show a real interest in what they do and who they are, and above all, try to provide value to them, too.
Networking is about forming mutually-beneficial arrangements, so never get so caught up in what you’re doing that you forget to check in with them, and wherever possible, contribute something. Whether it’s an interesting article, or a connection you’ve made that they might benefit from.
Hopefully, by now you’ll have a good idea of how to network and connect with investors, and why staying warm is so important. Referrals are some of the strongest and best ways to make these connections, so the power of your network is the key.
Still, a powerful network is nothing without a good idea of who you’re looking for, and this takes an understanding of the stage you’re at, and what it takes (read: financing) to reach the next stage for your company. Once you know this, find out where your investors are looking, and make sure you’re present and prepared.
With a strategic networking-focused, you’ll soon be making the right connections that will lead you through your expansion and well into the long-term success of your company.