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Find Your Dennis: How to Close the First Investor

3 Tactics to help with closing your first investor


$10,800. Dennis' check was the smallest check we've ever raised from investors; but it was also the biggest. While subsequent venture capital and corporate investments added several more zeroes to our bank account, Dennis' check--our first--added much more at the earliest stage in our company's founding: credibility with our investor community, confidence we could achieve our vision, and capital to reach critical company milestones.

Every entrepreneur raising capital comes to the same conclusion: no one wants to be the first investor in their company. Many investors want to be early. "Early" equates with the high risk, high reward that has elevated a select few angel investors into billionaire status, but no one wants to be the very first. Like us, you need to find your Dennis--the one investor who will jump off the cliff with you and be that very first investor. Follow these three tactics to find and close your Dennis:

1. Create a network of could-be investors

If you plan to go around cold calling qualified investors to invest in your business, particularly if this is your first company, good luck. Not only does the lack of an established connection prevent you from getting in the door with investors, it is often the case that entrepreneurs ask for money before they truly need it.

To find your Dennis, you have to build a strong network of could-be investors. This network creation comes as the result of two steps. First, identify could-be investors in every one of your networks (work, school, locality, friends and family). Founding NuLabel out of school, we immediately looked to our alumni network for could-be investors and in our local entrepreneur community in Providence, RI--where we connected with Dennis. Second, engage could-be investors to provide what you really need when you first launch your business: intellectual capital. Most could-be investors bring valuable advice to the table, and engaging could-be investors as informal advisors can build a strong connection to your company's story without immediately demanding they open their wallet to help you as an investor.

2. Treat could-be investors like they already invested

Now that could-be investors are engaged and even providing occasional, informal advice, treat these valuable members of your network like you would an existing investor. Provide them with regular updates that establish meaningful, achievable milestones and showcase results. As you achieve these milestones and share them in a consistent and periodic manner, momentum builds, risk starts to evaporate, and your could-be investors start to become will-be investors as you establish a track record of results that exhibit not only you achieving your vision, but their intellectual capital creating value.

3. Ask for the check

Don't wait for your potential first investor to offer to invest, because that won't happen. Instead, ask for a specific investment; state the use of proceeds; and most importantly, explain how this first check can be leveraged into many additional, bigger investments from others. With an immediate term need to fund a specific, measurable milestone, we asked Dennis for the capital to cover the expenses to get to that milestone. We showed upfront how we knew we would exceed expectations and that we had several interested could-be investors awaiting the achievement of that milestone who ultimately jumped in less than one month after Dennis' check came in and we accomplished that immediate term business objective.

....

The lunch bill when Dennis told me, "Yes, I'm in," was modest: two cheeseburgers, two Diet Cokes, and a side of fries. The feeling after Dennis agreed to invest $10,800: well, that was worth a million bucks.



Get your Free Business Plan Template here: http://bit.ly/1aKy7km



Marc Kneepkens's insight:

Big point: get your first investor committed, no matter how big that check is, the rest will follow.

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When to work with an incubator or accelerator


If you live in start-up world, as we do there are an astounding number of incubators and accelerator schemes out there. Frankly I could spend most of the article listing them and telling you what they do and how they work. But I won’t – not for a public article, but if you stay after class I will provide some pointers….

However there is a real question to be answered, as an entrepreneur what are the benefits of becoming part of an accelerator/incubator. More to the point what is the difference between them?

To read the full article, click on the title or image.



Get your Free Business Plan Template here: http://bit.ly/1aKy7km



Via marcduke
Marc Kneepkens's insight:

Figuring out what fits best for your startup is part of the process of being successful. Do you want to go the fast way and join an accelerator experience, or do you need a little more time and get things straight? An incubator might be what you need. Or do you need none of the above?

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What I’ve Learned in My First Month as a VC

What I’ve Learned in My First Month as a VC | Pitch it! | Scoop.it

After 13 years at startups—the last four at Twitter—I’ve made the transition into venture capital as a partner at Redpoint Ventures. It has been just over a month since I began spending my days on Sand Hill Road and in that short time, I’ve learned quickly about working in a tight, seasoned partnership as well as having listened to some of the smartest, most interesting startup pitches.

Thus far, my transition from an operating role into an investing and advisory role has been a rapid, intense education. Some parts of the job are as I expected but others have been surprising. Before it all becomes a big blur, I thought I’d share some of the most interesting and unexpected lessons I’ve learned —so far:

To continue reading, click on the title of the article.



Get your Free Business Plan Template here:

http://bit.ly/1aKy7km



Looking for VC capital? Learn from the best, watch this presentation by the CEO of Growthink: 'VC Pitch Formula'



Via Guillaume Decugis, Marc Kneepkens
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Guillaume Decugis's curator insight, December 4, 2013 11:27 PM

A candid list of lessons learned from Ryan Sarver that gives interesting insights on how VCs will look at an investment opportunity. Useful to craft the perfect pitch. 

Marc Kneepkens's curator insight, December 7, 2013 8:17 AM

Whether you are a Startup looking for funding, or an investor, looking for the right investment, there is a lot to learn from this article. It's and inside viewpoint that examines the process of funding the right idea and team.

Lori Wilk's curator insight, December 23, 2013 7:30 AM

It's great to learn from what others have tried and experienced so that you can be better prepared.

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6 Questions Every Business Plan Should Answer

6 Questions Every Business Plan Should Answer | Pitch it! | Scoop.it
What investors, mentors and advisers look for in business plans.
Marc Kneepkens's insight:

www.Business-Funder-Insider.com provides information and articles to improve your business presentations.


Get your free Business Plan Template here: http://www.business-funding-insider.com/free-business-plan-template.html


or check our 'Growthink's Business Plan Template Review'
Can you write your business plan in 8 hrs or less? http://www.business-funding-insider.com/business-plan-template.html

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5 Mistakes to Avoid When Approaching an Investor

5 Mistakes to Avoid When Approaching an Investor | Pitch it! | Scoop.it

We are pitched thousands of business plans annually. Here are the top five mistakes to avoid.

“All these investors claim that there are not enough opportunities out there to invest in, yet when I send them my business plan, I don’t even get a response.”

Considering that venture capital investors get tens of thousands of business plans, investor decks and other pitches annually, it is hardly surprising that not all of them get an investment. Based on reactions to one of my previous posts on investor feedback, it seems that a lot of entrepreneurs don’t even receive a response to their presentation.

At the end of the day, this is the investor’s fault. But there are certain mistakes that I have seen entrepreneurs approaching Credo commit over and over again, which significantly diminish the chance of any investor reacting to the pitch. Thankfully, they are pretty easy to fix.

Here are the top five which anyone can and should avoid:

To read the full article, click on the image or title.



Get your Free Business Plan Template here: http://bit.ly/1aKy7km




Via Ivan Berlocher
Marc Kneepkens's insight:

Good points. Also read 16 reasons why your investment proposal won’t get read! : http://www.business-funding-insider.com/investment-proposal.html

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Michael Binzer's curator insight, May 18, 10:05 AM

Good info if you are thinking of starting up as an entrepreneur. Also the business plan template

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P2P lending: What's to worry?

P2P lending: What's to worry? | Pitch it! | Scoop.it

Former FDIC chair Sheila Bair explains why a good idea needs more regulation. (Investors are making good money extending credit to their fellow Americans via crowdlending platforms!

Brother, can you spare a loan?

Investors are making good money extending credit to their fellow Americans via peer-to-peer lending platforms (P2P), such as Lending Club and Prosper. P2P is also good news for borrowers -- most of whom are consolidating debts -- because they can often get interest rates lower than those offered by banks.

Mon dieu! Decent investor returns. Cheaper loan rates. Could this actually be a good financial innovation? Perhaps, but I see some causes for concern.

Securities regulators fret about potential fraud, since the companies don't always document borrower incomes. The cops also worry that investors can't understand how the companies determine the likelihood of default. Says David Massey, North Carolina's Deputy Securities Administrator: "Peer-to-peer investors generally don't have direct access to the information that might let them know whether they're buying into a loan that's going to pay them back, or whether they're taking a flier on a situation that's going to end in a default."

To read the full article, click on the title.



Get your Free Business Plan Template here:

http://bit.ly/1aKy7km


Via Therese Torris, Marc Kneepkens
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Therese Torris's curator insight, December 28, 2013 2:13 AM
Expresses concerns that the cost advantage of crowdfunding over community banks might come only from lighter regulation
Marc Kneepkens's curator insight, December 28, 2013 9:43 AM

Good introduction to Peer-to-Peer lending. A good alternative for some.

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Does your digital strategy fit your business plan? | Business Tas blog

Does your digital strategy fit your business plan? | Business Tas blog | Pitch it! | Scoop.it

What do most small-to-medium businesses do when they try something new?

Generally, they fail to set clear objectives for reaching their goals. They fail to plan and as Winston Churchill said “failing to plan is planning to fail”.

As a business owner, you should start by understanding what you are trying to achieve and why. It’s important to ask yourself whether everything you do  moves you closer to your goals. If you are doing something that doesn’t then why do it? There are some things in business we can’t avoid (like bookwork), but it is vital that we think critically about everything we do.

Your digital activity is no different. Every business needs to ask why they are doing this? There must be a reason. A clear objective is essential to the success of the digital strategy.

Before you decide what your digital objectives are, look at your business plan (you do have one, don’t you?). What goals have you set? Are you achieving your current objectives?

Having a business plan reminds you why you are in business and what you are trying to achieve. Without a business plan, you will be playing hit and miss with anything you do, including your digital activity.


To read the full article, click on the title...


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Marc Kneepkens's curator insight, August 26, 2013 4:32 PM

"You do have one, don't you?" It's a given, no plan, no direction, no goals, no results.