Question by R: When seeking investment capital for new business, do I present plan to one investor or many?
I have my business plan ready, but I only have one investor who will meet with me. I’ve heard that others usually get several or many investors to each invest a smaller portion rather than having one person invest tons.
Is the investor going to be like, wtf, you want me to invest the entire amount you need to start the business?
I feel like getting investment money is impossible like getting famous acting. How do people start all these businesses?
Best answer:
Answer by EF
You are right that getting people to invest money in your company is very hard, since most (well, all) potential investors do not want to risk. To get investments, you need to convince them that (1) you are trustworthy and (2) your plan is likely to succeed. So, you need to demonstrate clearly that you know what you are doing–you have analyzed the market and you have strong convincing reasons to believe that the investment is a good one.
Potential investors usually look at the following factors: (1) you are experienced in that area; (2) you have done a thorough research of the market; (3) you are putting a lot of your own money, and a failure would be a catastrophic for your personal finances–which is the most convincing proof that you do not expect to fail; (4) upside is very high–i.e. in case of success your investors may get, say, 5 or 10 times their initial investment back; (5) you are honest and trustworthy.
You usually need to present your ideas to tens of potential investors in order to get one or two of them to invest. Talking with only one is like sending a resume to only one place when looking for a job–by far not enough.
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