Investors are not emotional buyers. They don’t window-shop so they can take their credit card out of the pocket and just acquire something. “Now, quick, or else….”. They need to see the company becoming, evolving, getting into troubles and solving some of them – before even considering an investment. Sometimes they do this openly, sometimes they just slow down the investment process so they can see the dynamics in the company.
As an entrepreneur, please don’t plan for “I just met this investor, it looks good, I will have the money in three months”, even though all investors will tell you that this is possible. It is, but it will only happen as a huge exception – that is if you have the coolest and most wanted company on the continent.
Better plan in advance – keep in touch with a lot of potential investors long time before you need the money. Tell them what your objectives are, so they see you achieving them.
Share your pains so they can understand the plot of the movie. When the time comes, they will be ready for you.
Boom: The average time between the first meeting and the investment closing is 18 months (personal experience).
Longer and better explained here. Written in 2010, some things have changed since.
- Tags: Investment, VC
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Florin Miron
December 12th, 2018 at 9:23 am
As usually a cold shower from Radu. It’s good and reasonable advice for entrepreneurs, not necessary young. But Radu, i would like to see investors with courage , to have the ”necessary organs” (”eye&balls”), to see the spark from the window of the shop, to have the courage to say ”i’ve seen a spark in your picture , you have half hour to prove it to me” . Things were changed, always in history by the people having the courage to step outside of the common path (maybe to enter in a shop because he have seen a spark in the window).
Gand bun Radu