David Cummings on Startups

3 Key Times to Talk to Investors

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David Cummings

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Entrepreneurs are always talking about talking to investors. There are so many pitch sessions, angel investor events, and venture conferences that entrepreneurs are constantly saying they want money. In reality, there are three key times for entrepreneurs to talk to investors:

  1. When you don’t need money: this is the best time as investors want to fund successful businesses that don’t need financial help
  2. When the business has hit a major milestone: whether it’s a new revenue achievement (e.g. $1M in annual recurring revenue) or a major new relationship, investors love to hear about results
  3. When you’re building a relationship in advance of raising money in the future: investors invest in people they know, so it’s important to build relationships well in advance of needing money (if you’re going to start raising money in six months, now is the time to start building relationships)

Entrepreneurs would do well to be more intentional about how and why they talk to investors. Talking to investors when you need money right away and don’t have an existing relationship is what most entrepreneurs do, and it’s the least effective.

What else? What are some other key times to talk to investors?

Comments

4 responses to “3 Key Times to Talk to Investors”

  1. Greg Benoit Avatar
    Greg Benoit

    Entrepreneurs should also feel comfortable passing on the request of an investor asking for a meeting. At QGenda we receive about 3 inquiries a day from investors asking to meet, so we often have to say thanks but respectfully pass. If I do take the meeting, then I typically ask the investor to provide me an introduction to a prospective customer before I accept the meeting. This shows me if the investor has contacts that can help us continue our growth by way of introductions to prospects.

    Reply
  2. Life as an Investment Avatar
    Life as an Investment

    In Sweden we say “Think before after”. Basically, you need to know you would need money in advance, quite difficult, taking under the consideration that sometimes you want to speed up and deliver a demo asap to the market.

    Reply
  3. aforst Avatar
    aforst

    Great advise, as I agree investors have a much greater confidence investing in companies that are growing and successful. Not stuck in a rut and might be shrinking.

    Point 3 in general is the absolute most important regardless of raising money. It just good practice which will grow your network.

    Reply
  4. 3by3D (@3by3D) Avatar
    3by3D (@3by3D)

    Thanks, David, lots of good insight in this post. Point #3 is a standout, and applies to entrepreneurs as well as job seekers and students. It’s like I tell my first-year students at Creative Circus: the best way to guarantee yourself a job in twelve months is to reach out to the agencies you want to work for right now.

    Reply

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