5 Things Investors Want to Hear

Welcome to this week’s installment on raising capital! Head over to our Youtube channel and take a look at this article from Entrepreneur to learn more.

We loved this article in Entrepreneur because it’s a little bit different than the average five things you hear about. We expected something boring and mundane that’s all common sense, but they put a little twist on the normal spiel, and we wanted to share it with you.

The five things that investors want to see here are:

  • People plus passion
  • Thesis and fit
  • Transparency
  • Strategic raise
  • Listening skills

Let’s talk about these!

People and passion. I learned very early on because a lot of my early work was with investment bankers we’d call private equity guys today. They managed funds here in Nashville, and their investment thesis was essentially: you invest in people first, the business second, and the industry third. Which is somewhat opposite of what public market stock investors would say. A lot of times you just jump in to any oil company because you think gas prices are going to rise. Anyway people plus passion. You know you need to put your best foot forward for sure, but you need to be able to come across as someone that really knows what you’re talking about and have expertise in this area, and you need to come across as passionate about it! A lot of times business people think passion is just being emotional. That’s absolutely not true. You want to go out there and communicate that you are so convinced of your own plan that you’re going to do whatever it takes to execute on it.

Thesis and fit. What does that mean? That you have thought out exactly what it is you plan to do, and then it fits well within the market. For instance, you’re not going to come up with a subscription model for selling retail gasoline. Those things work and actually do exist, but only for very specific niches like companies with big fleets. Your idea’s got to fit with what your plan is.

Transparency. They want to be able to look at you and believe that you are telling them the truth and that you’re telling them the bad stuff as well as the good stuff.

Strategic raise. They want to know that you’re not just looking for working capital to get you through the next six months or a year, that you are actually raising capital to take the company to the next level.

Listening skills. Investors want to invest in people that they think will listen to them. It’s perfectly natural. It’s their money and they want to know that they will have some influence or be able to speak into how that money is used.

We love the focus of this list, which boils down to relationships. Investors are looking for somebody that they can have a business relationship with, and they want to know that you’re not just looking for money wherever you can get it.

Harvard Grace is always working with clients who are raising capital. We’re actually working on a raise of our own, which we’ll be talking to you about soon! In the meantime, if there’s any way we can help you with your own projects or help your company get prepared to raise capital, let us know!

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