Transcribed article based on the video above.
The single best way to raise money from professional investors, whether they are angels or venture capitalists, is to have a preexisting relationship where they know you, they trust you and they have seen what you’ve accomplished. Now for a lot of us we won’t be in that situation.
So, what do we do?
It’s a very simple process; we meet and court those investors. We tell them what were going to do, we exceed on the goals and expectations we set and we do it over and over again. So, if you’re looking to raise an angel amount of 500 thousand dollar and you don’t have the connection to do it already, you find folks like me, who can introduce you to the angel investors in Southern California, Northern California, and New York. You go talk to these folks, and tell them, here’s who I am, I’m not looking to raise money right now you tell them your idea and I’m going to get this done in the next 3 months. Guess what you go back to them 2 months later, ahead of time and everything you said you were going to do, you got all that done and more.
And then in that conversation, you tell that hers what were going to do in across the next 3 months and then you go back to them another 2 months later, and you remind them, hey all those things we talked about and we said we were going to do, we got all those things done and we exceed it in a faster time frame.
And by going through that process once or twice, what happens is you are able to replicate that sense of credibility and trustworthiness that you might have with somebody over a year, 5 year, 10 year working relationship. And the investors will know if this is somebody who, on very limited resources and very limited money can accomplish all this then how much can they do with my capital?
And that is the process you go through to engender that kind of trust and maximize your chance s to raise money from angels and venture capitalists.
Jason Nazar is the co-founder and CEO of Docstoc. He’s a frequent author and speaker on small businesses topics. You can read more of his posts here on Docstoc and at his blogJasonnazar.com.