Funding is an important part of building a business, but the demand for investment dollars is more competitive than ever. How does a small business stand out? While it's important to carefully refine your business plan, the decision about whether to fund a business or not often comes from something far less tangible. Investors usually connect more with the people in the business than the business model itself, so it's important to make the right impression from the start.

The first step is to put the right tools in place to connect with investors. Once you've scheduled that meeting, though, you should carefully weigh the words you use to describe your project. Recently, both investors and founders revealed a few tips to help businesses succeed in their quest to land funds.

Be Just a Little Crazy

Google Ventures' Bill Maris believes the very things that make a good investment can also be used to describe insanity. Persistence, focus, and a refusal to give up, even in the face of overwhelming odds, are the qualities often found in a good entrepreneur. They're also qualities found in an insane person.

But Maris isn't simply looking for signs of persistence. "At the end of the day, we're looking for people that are nice people, that you're going to work with for years," Maris says. "Life is short, so you want to find good-hearted people that want to do something good in the world that share your values and will treat you and their employees the right way."

Find Like-Minded People

After 17 years of funding businesses, George Zachary of Charles River Ventures finally realized almost all of the investments he wrote a check for had one criteria in common. They were all ventures he would have wanted to co-found himself. As an example, he mentioned his most recent investment, Udacity, which resonated with him as a company that could truly change things.

When your business connects with an investor who shares your passion, he'll naturally be the right fit for your organization. The first step in any funding search is to actively seek out the investors who are best suited to your organization. After you've thoroughly researched your options and landed that all-important meeting, know the right questions to ask to make sure he shares your vision.

Have a Passion

At one time, DuckDuckGo's Gabriel Weinberg was searching for frugal founders who easily accepted mentorship and direction. However, over time, he realized the benefits of finding someone who feels passionate about his business. He's seen founders dropping out of their businesses when things got tough and, while he doesn't blame them, he believes it's in large part due to the fact that they weren't passionate about the work they were doing.

As for Y Combinator's Jessica Livingston, she looks for someone who has an expertise within his domain. She's found that when someone has years of experience in a field, he's more likely to be successful. If someone is merely launching a startup for the sake of launching a startup, he'll probably fail.

Isolate Information

When a founder meets with investors, it's easy to thrust volumes of information at them in an effort to explain every facet of the business. But as Alex Ljung, SoundCloud, points out, it's very difficult for a person to feel passionate about everything. By simplifying your message, you can more easily get to the essence of what your product or service is.

"You have to pick certain things," Ljung said. "By reducing it from a lot of information to very little information, it became a whole different scenario. People could actually understand it and start feeling it in the meeting right away, which they had no chance of doing when I was bombarding them with info."

Whether a business is seeking investment dollars or trying to connect with customers, passion, and simplicity are important. When a founder really believes in his product or service, it shows to everyone he meets. For the right investor, this passion is more likely to make a connection than a disjointed, long-winded message. In time, after researching and meeting with the right investors, a business will naturally find the right investor, who won't be able to resist investing in this exciting new company.

Published on: Apr 9, 2015