One of the first major considerations entrepreneurs will have in the early days of their business will be investment. With $58.8 billion invested by venture capitalists in 2015 there's still a lot to go around -- I refuse to believe that the bubble has popped for early stage startups.
But investors aren't just investing in your business idea. They are investing in you as a person.
Across the board, these are the 5 key traits every investor looks for in an entrepreneur.
If you try to exaggerate your credentials, it will be apparent. Your investors have to trust you, just like your customers do.
Angel investor David Kiger also believes, "You need to be honest about your shortfalls and weaknesses. These are not things to be embarrassed about. Investors appreciate the honesty and will respect you more for it."
2. Can You Articulate Your Plans Clearly?
Some entrepreneurs think they need to be loud extroverts to win the attention of venture capitalists. But Bill Gates and Steve Jobs are just some of the many entrepreneurs who're introverted. Being loud isn't necessary - and can sometimes come off as disingenuous. Articulating your plan clearly is the what will make anyone see your vision.
Communicating with investors (just like your team) is about being able to lead by inspiration.
3. Be Passionate About What You Do
Entrepreneurs must make objective, emotionless business decisions but that doesn't have anything to do with their passion for what it is they do.
Investors want to know that the entrepreneur they are investing in will put everything they have into their venture. They also know that when trouble comes along the passionate ones are not going to run the other way.
4. Are your numbers in check?
The biggest complaint investors have is entrepreneurs who have no grasp over numbers. It's okay to be a passionate idealist, but the numbers are what matter in the end. This will determine whether your business sinks or swims.
One of the biggest sins entrepreneurs commit during pitches is they inflate the value of their business.
To recap: you need to demonstrate that you're a passionate entrepreneur who has a firm grasp of reality.
One of the things you need to know about raising venture capital is this isn't the end of the process.
Investors are looking for entrepreneurs who are looking at the bigger picture and future of their business. At the end of the day, they want to get their money back 10X. If you don't have a plan for the future, you're simply not going to get the attention you need to raise significant capital.
The Substance Matters
A lot of people will say that they believe in the entrepreneur more than they do the idea, and that's true, but only to some degree. The trick is to pitch to the right investors, for the right idea, at the right time in your market.
Think about it like aiming a product at your perfect customer. Find the perfect investor for you. There are tons of resources like Crunchbase, Angel.co, and even Linkedin that will give you some insight to the person you are going after.