Wednesday, September 23, 2015

Why I can't invest in you if you don't invest in yourself

Great article by Daniel Mumby

Being an investor isn't as easy as it sounds. It often requires you to ask very difficult questions, like:

"Why would I invest in you when you won't invest in yourself?"

Pitching for money is as much dark arts as science. So many elements go into the equation that equals success, and all it takes is one of the multipliers to be a zero, for the outcome to also be zero. That might be

  • track record, metrics/traction, story/message, persuasion factor, personality, audience or a hundred other factors.

One of the key elements that is often not talked about, and therefore often ignored by founders (but rarely ignored by investors), is your propensity to invest in yourself. What effort have you put in (beyond googling a phrase or 10, and downloading some free templates) into actually learning your trade or craft?

How much

  • effort have you put into research, preparation, learning, delivery?
  • did you prepare for difficult questions during the Q&A section of your pitch.
  • research have you done in targeting the right types of investors?
  • actual researching, testing and learning have you done in your target product market?
  • have you progressed in building a prototype, testing actual paths to market, or in creating partnerships?
  • 'skin in the game' do have (in cash & labour) on your own venture?
  • have you invested in your professional learning for the market in question?

Because if your answer to any of these is "not much", let me be frank - (in the words of Darryl Kerrigan from "the Castle") - "tell him he's dreamin' ". You are not just unlikely to get investment - you just won't. And I don't mean from me; I mean almost no investor.

"Why", you ask?

Well apart from the reasons I listed in earlier, you aren't competing for the attention of just investors in a vacuum; you are competing for their attention in a crowded field. As an investor, I get in the region of 25 cold approaches a week (which is a lot less than many of my peers). Do you know how many I've invested in? Zero . Yes, not one. 

Because few have done their homework; almost none, refer to my background, history, or investing intent. Fewer still reference my investor criteria, or past investments and almost none look at my articles about what it takes to go from big idea to successful entrepreneur.

 Because those that do, already know how to approach me. They don't behave like startup amateurs. They get introductions from people I know and trust. They engage in asking questions about whether I fit their team, (and that they fit mine). They ask 'value' questions, not price. And they determine early whether we have shared perspectives, values and beliefs. 

And they don't send me reams of business plans (that no investor reads), or pages of reasons why I should invest (who even invented the 'spray & pray' approach?).

Every investor is different, and they will have their own list. For some it's team - for me, it's founder - because that person is the one who draws the team to them.

Here's what I want to see.

And you are prepared to do just 2 things to succeed

  1. the first step and
  2. everything else that it takes.

If you can do these things, that's what will get my attention.

If you like this article and got value from it,  please 1/ share it, 2/ follow-me for more insight, and 3/ you can check out some of other my other posts. 

To your success, Daniel

About Daniel

Also traveling under the alias of 'That Startup Guy' , I am a co-founder of StartUp Foundation(The Startup Accelerator for Experienced Professionals) and am intensely, deeply, passionately dedicated to "The intersection between personal mastery & business entrepreneurship".

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