Getting investors on your side starts with a very simple formula, and it has nothing to do with financial projections.
There’s no better time to be an entrepreneur than right now. Not only is there a low barrier to entry for the business world, startups now have access to what is estimated as a trillion dollar pool of capital. But apart from crowdfunding portals that make money more accessible, fundraising can still be a painful and time-consuming process.
In fact, if you’re not a part of an elite circle of funding insiders, you might not know how to get a piece of that trillion-dollar pie. That’s why I sat down with my client and startup funding expert Varelie Croes, founder of ATECH* Conference, to learn what ambitious entrepreneurs need to know if they want to raise capital.
So if the money and infrastructure are there, what’s blocking entrepreneurs from getting funded?
Varelie Croes shares five steps to getting investors to back your vision (even if you’re an unknown startup founder) by helping you establish a foundation for telling a compelling story.
Get Clear on Your Values
Every startup is different and there’s no holy grail solution for funding challenges. However, instead of focussing on outside factors that may or may not be under your control, focus on what truly matters: what drew you to entrepreneurship in the first place?
Defining your core values is just the first step.
To succeed in the crowded startup world, you need strong, clear values. Your values feed into everything you do and influence every decision you make. They motivate during challenging times and provide a level head during times of success.
If your values are weak or unclear, investors can sense that you don’t really know what your business stands for. If you do not believe in your idea and are wishy-washy on your values, why should other people believe in you and give you money?
Picture the Legacy Your Business Will Help Create
Creating a legacy doesn’t mean you have to be the next Google. But you want this be your contribution to the world, the start of something meaningful. Your core values will play a major role in your business and development as an entrepreneur, and will establish the foundation for the legacy that leave behind.
Without clear values, you open yourself up to harmful outside influences (e.g. poor partnerships, shaky advice) that can threaten the legacy you’re building. Get clear on your core values up-front, and you’ll have a solid reference point to rely on when you inevitably have to make difficult decisions.
Neil Blumenthal, Warby Parker Founder and Co-CEO, said it best: “It’s not about the amount of wealth you can accumulate, it’s about the impact and change you can create.”
Have a Concise Message About Your Startup’s Value Proposition
As you’re raising capital, it’s important that you don’t lose track of why you are doing what you are doing. It’s not your idea but your actions and words that will create your reputation.
Therefore, it’s important that you are not only clear on your values (i.e., your vision for what you want to see more of in the world) and value proposition (i.e., what problems you are solving, what benefits you provide) but that you can also articulate this in a consistent and concise way, every chance you get and to everyone you speak with.
Revisit your values and value proposition with your team on an ongoing basis. Deeply ingrain them in everything you do. Integrate them into your communication with the outside world. This includes communications with prospective investors, partners and customers. It includes communications in person, via your website, social media, your copy and your packaging. Everything you do tells a story, so make sure it’s one that reinforces and aligns with your values.
Show Integrity in Everything That You Say or Do
Integrity is being in alignment with your core values. It is also one of the key characteristics investors are looking for in an entrepreneur. Having values that are unique to your business shows that you have integrity.
Even though some do it solely for the money, the vast majority of entrepreneurs want to create a lasting impact and drive positive change in the world.
When you get real about what truly matters to you, you might be surprised at how much your values open doors to invaluable relationships.
Invest in Relationships with the Right People
A vision backed by values is the force that creates connection. Investors need to connect with your story and vision. Once you are clear on your values, use them as your currency to look for investors (and people) who share those values. There are no stronger relationships than those centered in shared beliefs.
Investing time in the right relationships, putting yourself out there and being vulnerable helps engineer serendipity. The more you invest in your relationships, the higher your odds of establishing a meaningful connection.
So that’s our take on getting backed by investors, and using your unique set of values and story to stand out and get noticed.
A value-focused fundraising strategy is not only healthy for a company’s culture, but is also irresistible to investors. Your values play a major role in your business, your development as an entrepreneur and they establish the foundation for your legacy. Don’t take them lightly: Getting funded is only the beginning.
The Young Entrepreneur Council (YEC) is an invite-only organization comprised of the world’s most promising young entrepreneurs. In partnership with Citi, YEC recently launched BusinessCollective, a free virtual mentorship program that helps millions of entrepreneurs start and grow businesses.
Image credit: CC by 401(K) 2012