This is the fourth in a series of themed blog posts where we unpick the often complex areas around fundraising and getting investment in your business, and spotlight a few of the organisations and experts who offer guidance and support in this area.
We especially want to thank Piper PE for the expertise they have shared to support the Hatch community raise funds for their businesses.
The Importance of Investor Relationships
SE100 Awards 2023: Social Investment Award
Building strong investor relationships is a key skill for any entrepreneur, and this often takes time, trust, and transparency. When someone invests in your business they are buying into your dream and they are also taking a risk with their money.
Before committing to a funding partnership it is important to be clear on the level of control each party will have, the level of communication each party should expect, and what you each hope to get out of the relationship.
Watch this video from our expert partners, Piper PE, to get some top tips on what to look for and how to maintain good investor relationships.
Jax Unsworth, associate partner at Piper PE, explains what to look for in an investor relationship.
What to Consider
What are you looking for?
Whether you're looking for purely financial resources, advice as well as money, or a more involved partnership, this is something you need to be clear on from the start, and upfront about in investor meetings.
Matching expectations
Different investors will have different targets to measure success by, whether that is in terms of financial return on investment, or hitting social impact goals. Which targets are important and realistic to you?
Is it the right relationship?
Entering into an investment partnership will mean spending a lot of time together, and working closely throughout the ups and downs of your business. Do your values align, and do they have the right experience?
Above all else, honesty is absolutely fundamental to strong investor relationships. Investors would much prefer to be kept updated with any worries and concerns that you have, and any challenges that you are facing, rather than just being told good news and then confronted with a surprise when it comes to reporting.
How to Find Investors
Finding investors and investor houses, regardless of the scale of your business, can be a critical step in securing funding and support for your business.
Leon Hughes, partner at Piper PE, gives some top research tips on seeking investors.
Venture Capital Firms:
- Conduct thorough research to identify venture capital firms that specialise in your industry or stage of business.
- Use online databases and directories like Crunchbase, PitchBook, or CB Insights to find venture capital firms and their investment focus.
- Craft a compelling pitch deck and business plan tailored to the specific interests and criteria of potential venture capital investors. You can get support with this from Hatch.
Angel Investor Networks:
- Research and reach out to angel investor networks in your industry or region. These networks consist of individual investors or groups interested in funding early-stage startups.
- Utilise online platforms and directories that connect startups with angel investors, such as the Angel Investment Network, UK Business Angels Association, and London Business Angels.
Networking:
- Attend industry events, conferences, and seminars to connect with potential investors. Engage in conversations, share your ideas, and exchange contact information.
- Join entrepreneurial and industry-specific organisations or associations that offer networking opportunities.
- Leverage online platforms and social media to connect with investors, join relevant groups, and participate in discussions. LinkedIn Sales Navigator is a great tool to start with.
Other avenues include crowdfunding platforms, government programmes and grants, Incubators and Accelerators, as well as personal and professional networks.
Feeling Ready?
Remember, building relationships with investors takes time and effort. Be prepared to articulate your value proposition, demonstrate market potential, and showcase your team’s capabilities. Always approach investors with professionalism, and tailor your pitch to their specific interests and investment criteria.
It’s important to note that finding the right investors is not just about securing funding. Seek investors who align with your business goals, values, and long-term vision. Look for partners who bring industry expertise, mentorship, and connections that can help propel your business forward.
Have trust in yourself and the passion you have for your business. Investors are aware of the challenges that come with launching and growing an enterprise and will often be flexible, supportive, and accommodating if they are inspired by your vision and can see that you are putting in the work to make it a success.
Be sure to reach out to your network for support, and take advantage of opportunities through the Hatch community such as a 1:1 Consultation to refine your pitch deck, or our free upcoming events which include masterclasses and workshops on everything from storytelling and pitch technique, to financial forecasting and networking.
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