Raising capital for your business – finding online chemistry with investors

By Chantelle Arneaud, Envestors

When internet dating started it was viewed with more than a little scepticism. How could you find chemistry with a special someone without meeting in person?

However, the growth of smart phones, social media and the success of apps like Tinder knocked ‘meeting through friends’ off the top spot for ways for couples to meet.

Online dating becomes the #1 way for couples to meet


Source: Rosenfeld. Disintermediating Friends.

What does that have to do with raising capital?

Facilitated by the lockdown, the once slow adoption of digital by the industry has been spurred on. And just like online dating, online investing will be the new normal.

The investment industry is having its ‘Tinder’ moment.

And it’s is a good thing. Online dating took off because technology made it easier to find that special someone. It meant no more going to a club and shouting in the ear of someone in hopes you’d make a match or going to a BBQ and hoping there will be a friend of a friend there that might catch your eye. Through tech, searching singles could access the dating pool from their phone, vastly increasing the chances of making that special connection.

The same is true for online investing. Invite-only pitching events, closed networks and a reliance on personal connections all mean a limited exposure to investors, who have to work really hard to find out about deals. Now, with technology, they too can have access to the entire pool of investment opportunities from their phone. For entrepreneurs, that means a greater chance that you’ll catch their eye, get that first date and, if all goes well, seal the deal.

Tinder for early-stage investing

Like Tinder, online investment platforms, like Envestors, allow fundraising companies to have a deal profile. This is where you tell potential investors all about your investment opportunity. A good profile will include a deal summary with videos, team profiles and market information – everything an investor needs to decide if you’re the one.

The market-leading platforms include a chat feature where investors can ask questions. Investors can also follow you and receive automatic updates, so if they didn’t swipe right the first time, you might get another chance.

Those lucky enough to find a match can track their progress towards their investment target automatically, as platforms allow investors to pledge and invest online. Once you’ve got commitment, you can keep in touch with in-built investor relations tools.

Given the intense competition here are our tips for finding that special someone(s).

Attracting your perfect match

  1. A captivating profile

For a dating profile you describe yourself to provokes a question. But for your investment profile you ideally want to leave no questions unanswered. Having a robust profile is key. And include a succinct video overview of your investment opportunity to capture interest.

At a minimum, you’ll also need:

  • A market overview: What problem are you solving and how big is the addressable market?
    • Explanation of your product or service
    • Revenue model: how do you make money?
    • Traction: How many clients do you have, what shape is your pipeline in?
    • Introduction to the management team: track record, sector knowledge & previous exits
    • Competition: How are you different (and better!) to your competitors
    • Financial projections: How much money are you going to make over what time period?
    • Investment Offer: How much investment are you seeking? What is your valuation? What will the money be used for?
    • Exit strategy: What is it and what are some examples of recent exits in your market.

Have all your documents ready. A good investment platform will allow you to control access to your documents so you can share intimate secrets with select suitors only.

  1. Keeping interest

A savvy online dater will keep their photos current and you need to keep your profile fresh. Add regular (weekly is a good idea) updates on new customer wins, new hires, new partnerships, and sales results. Keep giving investors reasons to come back and take another look. Maybe they weren’t sure the first time, so keep showing you deserve a second look.

  1. Finding chemistry

Once in the diary first meetings are as crucial as first dates. Chemistry is always at play, so ensure you’re prepared so you can relax and be yourself when you finally meet.

Research your ‘date’ before you meet them.Find out what else they’ve invested in or what boards they sit on.

This will make it easier to break the ice and also to find out why they decided to make previous investments, so that you can tailor your pitch to them.

The final preparation point is to know your numbers. Don’t rely on your charm, make sure you know your numbers because you’re very likely to be asked about them and, often to justify them.

Always remember to consider the investor’s perspective. Their goal is to get their money back, so they need to believe you are capable of delivering the growth you are promising and that your exit strategy is sound. Investors are looking for reasons not to invest but if you listen well to what they ask you and say, and respond clearly and transparently, you might get that second date.

As you keep working with this new approach for bringing together entrepreneurs with investors, things can progress to the point where you find your perfect match.

Chantelle Arneaud is from Envestors.Envestors’ digital investment platform brings together entrepreneurs and investors across geographies, communities and sectors – creating the single marketplace for early stage investment in the UK. Envestors partners with accelerators, incubators and angel networks to provide a white-label platform empowering them to promote deals, engage investors and connect to other networks. Founded in 2004, Envestors has helped more than 200 high growth businesses raise more than £100m through our own private investment club. Envestors is authorised and regulated by the Financial Conduct Authority.

Web: https://www.envestors.co.uk/

LinkedIn: https://www.linkedin.com/company/envestors-llp/

Twitter: @EnvestorsLondon

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