You’re dealing with a difficult investor. How can you get them to invest in your project? (2024)

You need to realize that different investors have different mindsets and mandates. In particular, an angel investor or a family office with an individual personality and an institutional investor have fundamentally different mindsets about investing.Institutional investors' mandates and investment tastes can at least be estimated from their publicly available websites or databases. What is clear is that they have very different preferred investment themes and investment stages.Angel investors and family offices, on the other hand, are private individuals and don't have as much publicly available data, so they require a more emotional or personal networking approach. So the first step is to know exactly who you're dealing with.

Expect Every Investor to be a Difficult Investor!Currently, it's a buyer's market for capital. Investors have a myriad of options for investing and growing their wealth. Consequently, they can be and are super selective.When a potential investor shows interest, begin that relationship by really getting to know that person. Remember when you were designing your product and you learned everything about that product's user-buyer. You learned exactly what that user-buyer wants in a product. Now, repeat that process with investors. Find out exactly what this investor wants in an investment.Every investor won't be right for you, just like you won't be right for every investor. Keep screening for the right investor.Venture With Vision 😎

A startup is a company whose business model hasn't been proven yet, so it's hard to convince investors with numbers like revenue.So you need to talk to them from two perspectives: a logical story and a dream for the future.There are tons of business models, technologies, and markets out there. Investors can't understand them all, so the only thing they can evaluate is the "logical perspective" of the investment proposal. So if your proposal's story has too many leaps or doesn't flow logically, I don't want to read it. However, in order to make this logical argument, you need to clearly demonstrate with numbers, not sales, but basic data about the market. A story without basic market numbers is a "fiction" that only you believe.

While being honest and confident, it's essential to strike a balance. Avoid coming off as arrogant, aggressive, or desperate, as these traits can be off-putting to investors.

Most startup founders focus on (1) valuation and (2) control. The initial valuation means nothing. Only the exit valuation and terms are important. These are the terms you must understand and negotiate. Second, the minute you have institutional investors in your capital structure, you have accepted that they will exercise some oversight. They don't want to run the company for you. They simply want checks and balance and also help because they have seen hundreds of startups.

Navigating negotiations with a tough investor? Research their track record and be prepared to justify your valuation, milestones, and exit strategy. Flexibility is key, but never compromise your startup's integrity. Remember, it's about finding the right fit for mutual success. As negotiation expert Matthias Schranner emphasizes, knowing when to walk away is as crucial as sealing the deal. #Startups #NegotiationTips 🚀💼

In dealing with difficult investors, effective negotiation is crucial. Understanding the market, industry, and the investor's portfolio is key. Know your worth, goals, and bottom line, and be prepared to justify your valuation, milestones, and exit strategy. Flexibility is important, but don't compromise your interests easily. Creating tension in negotiations can maximize value, especially when backed by evidence such as a strong investment thesis, traction in the project, and engagement with potential clients and partners. Remember, emphasizing the "why" behind your venture, as advocated by Simon Sinek, adds depth and resonance to your pitch, fostering investor confidence and alignment.

Looking to win over a tough investor? Don't just talk the talk, show them your walk! Highlight your progress, potential, and impact. Share successes, challenges, and insights. Showcase customer feedback, user engagement, and revenue streams. Present innovation, differentiation, and scalability. Prove you're solving a real problem, creating value, and making a difference. Show, don't just tell. Let your journey speak volumes! 💼🚀 #Startups #InvestmentTips #ShowDontTell

Clearly articulate the problem your project addresses, how it adds significant value to customers, and the positive impact it has on the market or society. Investors want to see that your project solves a real need and makes a meaningful difference.

Listen as much as you speak. If you are good at listening and good at asking questions then you are part way there. A good investor pitch should be more like a conversation than a one-way pitch. That means you need to ask good questions when pitching an investment. Then, listening to your investor actively will help your investor like you more.Be curious about your investor. This means showing that you really care what your investor says and thinks. What your curiosity and questioning will give you is a better understanding of how your investor sees the world. For example, you’ll hear what they speak about, what words they use and what’s top of mind. This will allow you to be better liked by your investor

Exhibit respect for the investor's expertise, time, and contributions. Value their role in the partnership and show that you trust their judgment and advice. Building a foundation of mutual respect and trust strengthens the investor-founder relationship.

Facing a tough investor? Learn from every encounter. Reflect on what worked, what didn't, and how to improve. Apply insights to refine your project, pitch, and relationship. Expand your network, seek fresh opportunities, and embrace growth. Adaptability is key. #Startups #Investment #Learning 🚀

If you’re finding the relationship difficult before you’ve sealed the deal… think of it like a marriage… would you encourage someone to marry someone they find difficult and not on the same page? Answer should be: no If you can’t have open and helpful conversations before you’re ‘married’ - just think how tough the business separation might be. No money is worth extra stress, anxiety and hassle. Be patient, you’ll find the right match for you.

I am an investor but not a difficult one, and have dealt with many investors during my career. It is crucial to listen actively to their concerns and understand their perspective. Address their issues transparently and demonstrate your commitment to finding mutually beneficial solutions. Provide clear and compelling data to support your business case and alleviate any doubts they may have. Additionally, build rapport and trust by maintaining open communication and offering regular updates on progress. Finally, be prepared to negotiate terms that meet their needs while aligning with your business goals. By approaching the situation with empathy, professionalism, and a willingness to find common ground.

Find common ground. We all like people who are like us. Psychological research is full of findings that we like people with whom we share something in common. The link could be a school, a hobby, friends, past employers or even passport or first name. Find that link and you’ll find it easier to convince people.Make your investors feel comfortable during your pitchAs well as helping your investors like you, to convince investors you want to make your investors feel comfortable. There are many ways of making your investors feel comfortable, and this will depend who you are talking to. One simple idea is to avoid Death by PowerPoint when speaking to investors.