When You Raise Money, Investors Back People, Not Ideas

#Investors Back People, Not Ideas When raising capital, your first priority should be not only discussing your business but also talking about yourself. Here are three reasons why communicating your value proposition as a leader can make you a confident entrepreneur and leave investors with a favorable impression. #You Are the Real Competitive Advantage Talking about yourself helps you raise money faster because you are the secret ingredient in selling your brand. A company is more than offices, a business plan, furniture, and stationery. It combines tangible and intangible assets, including a distinctive value proposition and, most importantly, the people behind it—with you at the helm. A Stanford survey of hundreds of investors found that founders and management teams, along with entrepreneurs’ experience and passion, were the most important drivers of investment decisions. But how capable is the person leading this ambitious enterprise? Nobody knows unless you tell them. #Introducing yourself in greater detail shows prospective backers deeper aspects of the company, including your core capabilities and values. These provide crucial information about its culture, helping them assess your startup accurately. An investor who understands and appreciates the company’s intrinsic value can quickly decide when and how much to invest. #Closeness Builds Trust Would you give hard-earned money to someone you did not trust? Neither would investors. A Baylor University study of 600 executives found that developing trust depended on business leaders’ technical competence, ability to resolve conflict, and the overall honesty and benevolence of the people behind the business. The study also noted that, at the introductory stage when two businesses first meet, buyers emphasize a company’s reputation to estimate the risks of working with it. Earning trust may seem difficult when you are starting out, but it is essential to securing funding. Build a relationship that lets investors know you more deeply, both professionally and personally. To secure funding quickly, be willing to share personal information such as: Background and values Inspiration for starting the business Motivation to overcome obstacles Experience and track record Mission and vision Investors want to work with people and companies whose values, goals, and mission align with their own. In a global survey of institutional investors administered by Harvard University, every respondent emphasized environmental, social, and governance (ESG) factors in assessing corporate integrity. The study also found that 95% of investors regularly engaged with management teams to assess purpose and culture, particularly how senior representatives “communicate their purpose.” Weaving your personal story, values, and mission into your pitch can work wonders for rapport, helping earn investors’ trust and encouraging them to back you and your company over competitors. #Investors Want to Know Whether You Can Handle Pressure Running a business and raising capital are stressful. Operating a startup and being accountable to investors can be even more nerve-racking. Stress can affect effective decision-making. An experiment supporting this premise observed that participants willing to accept risk made bolder decisions than those receiving only a placebo. Prospective investment partners understand your pressure—they have experienced it themselves. As they listen and observe your manner, they try to gauge how you manage stress. Entrepreneurial nervousness can unsettle investors, who may interpret timidity as an inability to handle the demands of business ownership. Few investors would partner with such a company. Their concern is: if I intimidate this entrepreneur so much now, how will they manage the difficult decisions and negotiations involved in acquisitions, development, and operations? Fortunately, you can influence their perception. To project strength and ease nerves, begin your presentation by talking briefly about yourself and confidently showing what makes you different. #You Are the Key As an entrepreneur, especially one seeking investment, you must sell investors on the greatest asset you control: yourself. VCs care more about the people behind an organization than anything promoted in a presentation. To raise capital as quickly and effectively as possible, emphasize who you are, your resilience, and the values you represent. #36氪神譯局 (36Kr translation desk)