50 Different Shades Of Investors

Photo by Gavin Biesheuvel

We all need to scrutinize the responsibility of taking on an investor for our business with the seriousness of taking on a husband or a wife. Seriously — the repercussions are that high and that personal.

So many entrepreneurs are too eager to take on any investor because they’re worried that if they don’t move quickly enough, that the opportunity will disappear.

This eagerness comes with a lot of problems though, notably that you rush into a relationship that has the power to ruin you or your business.

An issue I witness constantly in behind-the-scenes conversations with other entrepreneurs is their struggles with misaligned investors. This issue can take up the majority of an entrepreneur’s attention if it’s bad enough.

Imagine having to date and live with a partner you detest, well beyond its expiration date — that’s what it’s like when you have an investor you’re not vibing with, except you can’t just leave. You’re bound to them by the business or a contractual obligation to them.

Finding The Right Investor

There’s a strong misconception that investors are buttoned-up, formal types who require a Shark Tank style presentation when pitched a business.

This isn’t true, in fact, less than 1% of startups are even funded by VCs or angel investors, so you can look for funding without even circling investors from this world.

There are investors out there who care about the same things as you, hold the same passion for your idea, and look nothing like Mark Cuban or Barbara Corcoran.

If you shake off the clinical and corporate perception of what an investor should look like, hell, a future investor of yours may look just like a friend of yours.

Thoughtful Investor Search

Here’s the reality of what’s out there: investors who are just regular people looking for the opportunity to invest in something they believe in.

Currently, the majority of startups are either self-funded or receive investments from crowdfunding campaigns or friends and family. So whoever will help fund your startup will likely be someone you already know or a friend of someone you know.

With this reality in mind, that investors aren’t just one type of person — you can start viewing investors as an audience of people whom you can selectively choose from.

Being selective about the investors you work with is something I strongly recommend and believe in. To me, the relationship you go in with your investor is as serious as taking on a husband or a wife, so I recommend that you treat your search like so.

Write a list down, get visual about who this person is — if you could map out every single detail about this person, who would they be?

Here are some questions to ask yourself when defining your dream investor criteria. Heck, if you want to create a vision board defining who this person is, even better.

  1. Who is this person?
  2. What’s their personality like?
  3. What are your non-negotiables in an investor?
  4. What personality traits would completely clash with yours?
  5. How do you want to start a conversation with a potential investor? Will it be through an in-person coffee meeting and then progress to a more formal discussion?
  6. What are 5 things you need to see in this person in order to seriously consider them as a potential investor?
  7. What kind of expertise will they bring to the table? How will this investor be helpful to you?

If you’re building a gallery space, you can definitely find an investor who has an artistic background. If you’re creating a startup with comic books, you can find an investor who is as obsessed with comic books as you are.

Don’t tie yourself down to only one possibility when it comes to investors and settle for someone who likes your idea, but doesn’t really get the full vision of what you’re building.

When you look for investors, you need to find someone who lives up to your potential, not someone who checks off 6/10 items of your list. Stay open-minded, create a very clear vision of who you want, and be patient for the perfect match.

Are you building a healthy business that’s poised to grow? Grab my free checklist to find out.

I create moneymaking brands with womxn entrepreneurs who refuse to settle for mediocre. www.ascent-strategy.com

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Sophia Sunwoo

Sophia Sunwoo

I create moneymaking brands with womxn entrepreneurs who refuse to settle for mediocre. www.ascent-strategy.com

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