In which cases do investors not give money to a start-up?
A well-known venture investor Brad Feld somehow told what mistakes novice businessmen make in the process of searching for investors. He saw many examples and decided to share his rich experience. In this article, we will discuss these errors in detail so that you can take them into account and never repeat them.
1. Lack of knowledge about the investor. Brad Feld invested a lot of money in the computer industry companies, so he does not cease to be surprised when people from completely different spheres come to him. Entrepreneurs should offer to invest only those investors who specialize in their market, rather than any other.
2. Sending a 100-page business plan by mail. Once such an approach was justified, but not in our time. Limit yourself with a short email message, which summarizes the information about your project. Four pages of facts (!) — this is the maximum that you can imagine. Better two or one page. Why? Because the investor does not have an unlimited time reserve and will not read every letter of a hundred pages in volume. He should be interested in the idea, then in any case he will respond.
3. Do not send your proposals in bulk. An impersonal letter is a bad practice. Each letter should be addressed to a specific person or company. Otherwise, the chances of investor’s interest will be catastrophically small.