Unfortunately, most of us don't have enough resources to bootstrap our own startups, so we are completely dependent on investors to help turn great ideas into great businesses.
Yet in my experience on both sides of this equation, I find that many aspiring entrepreneurs focus only on the best idea, assuming that it will attract the right investors. In reality, that's only half the story.
The other half is you. You need to work just as hard to convince investors that you are the best person to take your idea from a dream to a successful business and provide an impressive return on their investment at the same time.
Here are some key strategies to enhance your position as an attractive investment opportunity, independent of your idea:
1. Highlight a greater sense of purpose than making money.
You need to show how your business will make money and provide an impressive investor return, but that should be only the beginning. Emphasize your real ambition to change the world, through helping the underprivileged, improving health care, or saving the environment.
For example, Blake Mycoskie of Toms Shoes attributes his ability to raise a seed round and build a $400-million company to his commitment to provide a free pair of shoes to the underprivileged for every pair sold. He didn't have any big technical shoe innovations.
2. Develop a personal story as a visionary and learner.
Investors love entrepreneurs who come across as constantly on the lookout for new ideas and able to grasp the larger implications for market change. Your story should include childhood initiatives, industry organization leadership roles, and online influencer organizations that you support.
Many of his original investors still remember when Facebook founder Mark Zuckerberg first related his personal challenge to only eat meat that he killed himself, in an effort to learn sustainable farming and consume resources responsibly. His campaign only lasted a year, but it convinced some that he was a potential visionary and a constant learner.
3. Show that you love change, but understand reality.
Above all, good business people have to remain practical, not be perfectionists, and be able to get the job done. That means you need to show examples of your ability to get results when all around you are bogged down on details, or unable to face the harsh challenges of the real world.
4. Offer an attractive and viable investment equation.
As you may have seen on the Shark Tank TV show, offering a tiny equity amount for a large investment will not endear you to investors. They need to believe your valuation, based on current revenue and intellectual property, and feel the equity offered gives them a real return for the risk.
5. Display real commitment to a plan, with milestones.
Passion and confidence are a good start, but every investor wants to see a credible plan, with specific milestones along the way. These show a focus on the business elements required for success and metrics for ensuring accountability, management control, and feedback along the way.
6. Emphasize the value and skills of your team.
Founders who present themselves as lone entrepreneurs may develop an innovative solution, but building a business requires a team. You need to show that you have a powerful team and can attract and lead people with strong skills complimentary to yours for marketing, finance, sales, and operations.
7. Demonstrate flexibility, resilience, and determination.
Smart investors know that no matter how certain you are that your solution is right, you will probably need to pivot at least once as you learn from the marketplace. You need to show you have a "Plan B" and a never-give-up mindset in handling any competitive threat or customer reaction.
The message here is that it is just as important to develop and communicate your personal innovative strengths as it is to pitch your solution's innovative features.
As an investor, I have seen many great ideas fail by the wrong entrepreneur, and other less grandiose ones sail to success by world-class entrepreneurs. Never underestimate the power of you.