Know Your Investors
Many entrepreneurs ask me about the best way to approach an investor to seek funding for their business ideas. This is an extremely important question, but you would be surprised to learn how many startups and entrepreneurs have no idea how to answer it. It is not uncommon for entrepreneurs to be so immersed and involved in their idea that they neglect to do the research necessary when preparing to approach an investor. When it comes to investing in a startup venture, investors tend to invest in niches and industries that they are familiar and comfortable with. If your idea has nothing to do with these niches, you will not be funded. Investors’ time and money are limited, so they will not be inclined to waste them on an idea they don’t know much about. When approaching an investor, ensure that you keep in mind the following three guidelines in order to make the best use of both your time and the investor’s time: 1. Do your homework. This sounds basic, but so many entrepreneurs discover a prominent investor and contact them with their idea, whether or not that investor even invests in that particular type of business. Conduct research through industry periodicals as well as the Internet. Look for investors who invest in ideas similar to yours. You should also talk to people who are in your industry in order to find out who is investing.
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