Key idea: While a deal needs to make sense, investors are willing to back an idea if you are able to fulfill the fundamentals of building good relationships, including earning their trust.
It’s possible that the idea of finding investors to help you raise funds to launch a dream or expand your business has never entered your mind. Even if it has, you may be thinking that because you don’t have a big name, your business is small, or you aren’t well connected, investors would never be interested in helping you to raise capital.
The truth is that there are plenty of investors available to help you raise money—you just need to know where to find them and how to best approach them. This week’s Stay Paidguest, Brad Blazar, can help.
As he explains in his interview, Brad’s own story is rather incredible: while working for an oil company when he was in his twenties, he learned how to convince people to give him their money to advance his employer’s purposes. And he was good at it, making six figures while working only 12‒15 hours a week.
Today, Brad has an impressive track record of enabling others to raise hundreds of thousands, even tens of millions, of dollars by teaching them how to find, approach, and pitch investors. During his interview, he shares some of what he instructs his clients to do to raise money from investors.
How to find investors
Finding people who both have sufficient discretionary income and want that income to work for them isn’t as hard to find as you might think.
In every major city there are groups of well-to-do individuals who publicly advertise that they are looking for investment opportunities. They’re called investment clubs, and they have members who are interested in cryptocurrency, stocks, real estate, and even the next big idea.
You can also do what wealth managers and financial advisors do to find their prospects—buy highly-targeted lists of affluent addresses and households. An internet search will quickly show you that there is no lack of companies willing to provide these lists (for a price).
Then there are the out-of-the-box ideas that may just pay off. During his interview, Brad shares one such idea that he’s used routinely to collect business cards from ultrahigh-net-worth individuals. It’s amazing in its simplicity and sure to trigger a “why didn’t I think of that?” reaction.
How to approach investors
As a business coach, one of the biggest mistakes Brad sees his clients make is pitching their opportunity before they’ve developed the necessary trust with an investor. To help correct the problem, Brad’s identified a four-step process to raising capital:
- Introduce: Share about yourself and allow investors to form an impression of you.
- Converse: Learn about potential investors and determine what might tempt them to invest in your idea.
- Build trust: Show investors that you are reliable, passionate, and have a plan so they can be assured an investment in you wouldn’t be a waste of money.
- Pitch: Once you’ve established the relationship and earned their trust, you can move onto pitching them your idea.
A second mistake his clients make is not crafting their pitch in a way that will inspire an investor to go deeper. Many of his hopeful clients will develop pitches that explain what they have to offer but don’t hook potential investors to engage with them and investigate further. Brad gives an excellent example of how to do this through sharing his own pitch.
How to pitch to investors
The details of every pitch vary, but as Brad says, people invest in people. As he notes in his interview, the decision to back someone is an emotional one that an investor will logically justify to themselves later. In this way, wooing a potential investor is exactly like making a sale.
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