Entrepreneurial Insights to Securing Investment

Focusing on Quality not Quantity

Following on a recent study it argues that many overseen entrepreneurs when they are not actively supported or promoted by successful networks or ecosystems, these entrepreneurs can still meet and reach out to investors. If they know how to make most of opportunities presented to them, and also by being efficient and leveraging their existing networks by being specific on their targets and excluding noise and time consuming investors that in many cases have no common interests or share a similar vision in order to invest in their businesses.

Introductions and Entrepreneurial Stories

In terms of strategic executed plans, it is quite common and possible to connect to a random investor or person of interest by utilizing intermediaries and vetted referrals. In the case the entrepreneur has had in business for a while, these connections sometimes come naturally through the word of mouth, brand recognition or business data publications.

The skills and the decision making process of any Venture Capitalist is constantly being evaluated and executed by processing an initial arbitrary funnel selection. All investors tend to be approached and bombarded by pitches, even when not solicited or entrepreneurs understanding their business model or scope of operations. Under this context, and the sometimes blind fund raising strategies by entrepreneurs, on the other hand, investors always being a target by being sent unfiltered noise, personal egos and a competition of shouting the loudest, it is understandable that most will prefer introductions, and trusted contacts, however this creates a sub-economy of intermediaries, referral companies, data algorithms developers, etc. where in 99% of cases is a waste of time to find the next unique big tech company or ground breaking entrepreneurs/business that can deliver at least 10X on their investments. If then follows there is no best way other than to meet at networking events, conferences or in person to try gauge the potential (including their personalities and attitude) and test executions from their existing results thus not just analysing potential rather facts as foundations for possible investment final decisions.

Negotiation Tactics

Exchanges between entrepreneurs and investors, tend to manifest in two primary forms, reciprocal and negotiated.

In the case of reciprocal strategic tactic, entrepreneurs or early businesses contribute or facilitate to a service or offer a benefit without knowing for sure when or if the other party will reciprocate in an appropriate proportion of value received, even when promised and agreed by the partner company. Whereas in negotiated strategies of mutual benefits, entrepreneurs know the precise terms of exchange often in written agreements. In either strategic tactics, most of the leverage will always be on the side of the larger or more established business, and this is where can be tricky for entrepreneurs, to know how much to give away knowing or hoping the larger business will honour and value the smaller business proportionally and not be taken for granted.

Inspiring Stories Do Not Guarantee Success

The published work above, did find “well-connected” entrepreneurs tend to gain more, and varied introductions, which makes sense. Nevertheless, more in depth and careful planned introductions over time will lead to a higher success rate of investment and growth, combined with increased business reputation and being more sustainable in the medium to long term.

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