Editor’s note: “The Angel Connection” is a new feature in WRAL Local Tech Wire. LTW asked consultant Bill Warner to share with readers advice for entrepreneurs seeking investment. He is chairman of the Triangle Accredited Capital Forum, an angel investor network with over one hundred members throughout the southeast. The Angel Connection is published weekly.
Chances are that your potential investors know more about starting and running businesses than you do. Their accumulated wealth is proof that they are good business people.
If you come across as arrogant and not willing to listen and be coached, your potential investor will conclude you will not be a good business partner.
I know this is common sense, but sometimes entrepreneurs get totally wrapped up in their perspective of the business and are not able see other points of view. If your mind is closed to other perspectives, the door to investor money will be closed as well.
Assume the Best Intentions
The best policy to have when engaging potential investors is to assume that they are interested and are responding to you with the best intentions of wanting to see you become successful. You will be asked pointed and hard hitting questions, and the tone of them might not be to your liking. Your reaction should always be founded in the assumption of best intentions, and your response needs to be oriented that way. This doesn’t mean that you need to allow yourself to be bullied or insulted, but it does mean that you need to stay above how you might be reacting and keep the conversation at a professional and business level.
Sometimes you will be hit with the most obscure questions or observations and have the tendency to discount the person asking them. Keep in mind that you are speaking to people who have different perspectives based on their backgrounds. Keep an open mind when listening to them, and try to put yourself into their shoes and understand where they are coming from. Sometimes you will find a point of view that you had not thought of, and it might teach you something about your business that you did not know. Go with the question, ask for further clarification and carry on a conversation within their perspective, not just yours.
No Defensiveness Allowed
An associate of mine always reminds me that there are no bad questions; only bad answers. Don’t fall into the trap of reacting defensively to any question you might get. A potential investor wants to see that the person running the company is mature and can handle most business situations with a high degree of professionalism. If you react badly and show your lack of respect, they will probably conclude you have little respect for others as well.
Stay Above It All
The people that get respect are those that show respect of others. As you meet more and more investors, potential business partners and customers, your business demeanor is going to create an impression that will make or break your potential relationship with them. If you come across as if you have all the answers and are closed to other points of view, you will remain alone with them. If you have questions about investor interaction, don’t hesitate to contact me.
About the author: Bill Warner is the Managing Partner of Paladin and Associates, a business consulting firm in the Research Triangle Park area of central North Carolina, and is the Chairman of the Triangle Accredited Capital Forum, an angel investor network with over one hundred members throughout the southeast.