When you’re looking for equity funding for your business, it can be daunting. It may also feel like a lonely process. Perhaps you’ve experienced stepping into a crowded room where everyone seems to know each other already. Or maybe you’ve pitched to a room and wondered why no one has followed up with you afterwards. How do you find the right investor for your business? How do you approach them without feeling like you’re pitching into a void? And, most importantly, how do you build rapport with investors that leads to a meaningful partnership?
Breaking the process down into bite-sized steps makes it all feel a little less daunting.
Step 1: Finding the Right Investors
Not all investors are created equal, and that’s a good thing. The best investor for your business isn’t necessarily the one with the biggest bank balance. It’s actually the one who aligns with your vision, understands your industry, and can offer more than just money.
So, start by doing your research. Platforms like Angel Investment Network, Beauhurst, and LinkedIn are good places to find investors who are actively looking for investment opportunities. Also, it can be worth seeing if there is an angel network or syndicate who backs business in your area or sector – these groups of investors often pool their resources to back startups.
When researching your options, ask yourself:
- Have they invested in businesses like mine before?
- Do they bring expertise or connections that could help me grow?
- Are they likely to understand the risks associated with my stage of business?
Finding the right investor isn’t about casting your net wide, it’s about focus and targeting individuals or groups who’ll see the value in your business and want to help you succeed.
Step 2: The Art of Approaching Investors
Having found the right investor, it can feel intimidating to approach them, but remember, investors are human too. They want to see real people, entrepreneurs with passion, vision, and a plan. So how do you stand out in their (probably overflowing) inbox?
The first thing you need is a strong executive summary or teaser deck. It’s your calling card for securing a meeting to pitch. It’s the first thing an investor will read and it needs to entice them to want to find out more – by meeting with you. A well-crafted executive summary doesn’t just highlight what you are doing, it explains why you are doing it and how much traction you have built. To really stand out to investors, you’ll also want to highlight why your business is unique, why the market really needs what you offer right now and why you, and the rest of your team, are the right people to make the business grow and thrive. Here are a few tips to help you shine:
- Personalise your message: Mention why you’ve chosen to contact this specific investor. Did they back a similar business? Do they have expertise in your sector? This shows you’ve done your homework and starts to build a point of connection.
- Be concise: Investors don’t have time for waffle. Get straight to the point, and make it compelling. Think of it like an advert for a film – tease just enough to make them want more.
- Attach your executive summary: This is where you really have the chance to elevate yourself – and your business – in an investor’s eyes. Your summary needs to highlight the market opportunity, your business model, provide detail through a financial forecast and evidence the progress you have made to date, all in a clear, engaging way.
For more tips on crafting your executive summary, read our blog here
Step 3: Don’t Get Married on the First Date – Build Rapport First
Once you’ve got an investor’s attention, the real work begins. Building rapport isn’t about schmoozing, about creating real connection. To do this :
- Be Transparent About Your Business
Investors appreciate honesty. If you’re upfront about the challenges your business faces, they’re more likely to trust you. No business is perfect, and pretending yours is will only raise red flags. Instead, show how you’re tackling those challenges and why you’re the person to do it. - Show That You Value An Investor’s Input
Investors bring more than just capital to the table. Acknowledge their expertise, and don’t be afraid to ask for their advice. People love to help, make a contribution and feel valued, and showing that you respect their opinion can help build a strong working relationship. - Communicate Clearly and Consistently
Good communication is the backbone of any relationship. Keep investors in the loop with regular updates, even if things aren’t going perfectly. Whether it’s a quick email to share a milestone or a more detailed report, keeping them informed shows that you’re serious and professional. - Focus on the Long-Term Vision
Investors want to know that you’re not just thinking about the next six months but that you also have a vision for the next six years. Share your long-term goals and how you see investors playing a role in that journey.
Common Mistakes to Avoid
We all make mistakes – let’s face it, we are human! But when it comes to building relationships with investors, there are a few things to steer clear of:
- Not doing your research: Approaching an investor without knowing their background or interests is a fast track to being rejected.
- Being overly pushy: Investors need time to evaluate opportunities. Give them space to think without bombarding them with follow-ups.
- Overpromising: It’s tempting to paint a rosy picture of the future, but unrealistic promises can backfire. Be ambitious but grounded.
The Golden Rule: It’s a Partnership, Not a Transaction
The relationship between a founder and an investor is like a partnership – some have even likened it to a marriage – one built on mutual trust, respect, and shared objectives. If you approach your investor outreach with this mindset, you’ll not only attract the right investors but also set the stage for a collaboration that drives your business forward.
Remember, investors aren’t just looking for businesses to back; they’re looking for entrepreneurs they believe in. Keep it real, be prepared and don’t hide your passion!That way, you’ll find investors are excited to support you on your growth journey.Got more questions about how to prepare to speak to investors? Join our free, online Funding Strategy Workshop where we share more insights but also answer your questions.
About the author
Hatty Fawcett, Founder of Focused For Business, is on a mission to make it faster and fairer for start-up founders and business owners to raise equity investment, particularly when they are doing so for the first or second time.
Reports show that gender, ethnicity and geographical location can all be barriers to accessing funding, with less funding going to female founders, ethnically diverse founders and startups based outside of London. Hatty and the team at Focused For Business believe investment should be available to everyone, and that the process shouldn’t be over complicated or unnecessarily time consuming.
Hatty, has a strong track record in supporting start-ups and raising investment. She has worked in three startups, raised equity investment for her former business (a marketplace) and also managed some of the investments Kelly Hoppen made when she appeared on the TV show “Dragons Den”. This experience gives Hatty a unique perspective when it comes to raising investment and the ability to see funding from both sides of “the fence”.
Hatty and the Focused For Business team run the Funding Accelerator programme which has raised over £22 million for businesses that have graduated from the programme, over £10 million of which was raised in the last 12 months. Join a free Funding Strategy Workshop to find out more.
Hatty’s unique perspective on start-up funding, and the work she does to level the playing field when raising equity investment, has resulted in her being a finalist in the Great British Entrepreneur Awards in 2023, and being recognised as Adviser of the Year twice (in 2022 and 2024) by Enterprise Nation.
