Talking with several entrepreneurs, and aspiring too, I often get questions about business angels like these:
- What if he/she wants to control the company?
- What if he/she does not allow me to do what I want to do?
- What if we have different and incompatible visions?
And so on.
Curiously, talking with investors you can hear questions like these:
- What if he/she takes the money and then runs away?
- What if he/she takes me in the dark of his/her decisions?
- What if he/she keeps me away from crucial decisions?
- What if he/she does not listen to other more experienced people and does what wishes?
- What if he/she fight with a co-founder and everything screws up?
- What if the sales manager is a charlatan?
Etcetera, etcetera.
I would like to assure you that a business angel is not interested in controlling your project, thus, we are not in front of an evil planetary master. On the contrary, he/she is very happy to let you do the job because the investor does not have enough time to do everything and knows that cannot force you to do something against your will. However, the investor wants to be involved in decisions and wishes to contribute with knowledge and expertise to the project’s success. Thus, a continuous dialogue between both of you is necessary.
As you can see, fears fill your mind as well as the investor’s mind before the investment.
Hence, the investment is mainly an act of trust, a trust that must be reciprocal. You could find a good potential investor, but you will never obtain the money you are looking for without conquering his/her trust and without trusting him/her as well.
Building this kind of relationship requires time, it cannot be obtained right away, so I suggest you reach investors before you need them and, more important, using the right methodology.
Well begun is half done!
If you contact the investor only when everything (your product) is ready, it is most likely that you will have spiders and webs under your arms before getting the investment. You have to start before you need it.
My suggestion is to increase your network with quality, find new people outside your inner circle able to enhance your perspective. Indeed, the best way to reach new investors is certainly this: asking for help on how to improve your project.
Please do not misinterpret. The idea is not to send hundreds of emails, as tomorrow would be the end of the World, attaching a 20-page document asking: “What did I do wrong?” You have to approach experienced people asking sincerely on how to improve your company.
Your mission, especially in this moment, should not be to obtain the financing, rather to understand what you are doing wrong and to aim to become a better entrepreneur.
And you will see that, when your project is investment ready, you will already have an investor.
Do you really need it?
Even though there are businesses that really need a business angel, there are also many others that do not need it.
A business angel should not be the objective of your company, but only a financing option. Probably you do not need it because you will be able to make your project profitable from the first day. Remember that “Bootstrapping” is a quality very much appreciated in an entrepreneur.
* You can also read this article in Italian: Il modo migliore per approcciare un investitore