Selling to investors - Investor Push

There are three types of sales in the lifecycle of most companies:

• Sales to investors: Selling to investors is about helping them understand the bets they are making by investing in your company.
• Sales to customers: Selling to customers is about helping customers understand the value your offering brings to them.
• Sales to exits: Selling to exits is about helping buyers understand the benefits they get from buying your company.

They are all sales processes, and have many things in common. The big differences are:

• The motivation: Investors are motivated by a complex combination of things, just as other buyers, but fundamentally, they are looking for a return on their investment. They give you money now and get more back later.
• The communications: Investors use a different language to communicate than customers, because they are making bets about the future, not simply exchanging one thing for another today.

Skipping the details...

Details of the generic sales process and components aside, there are some specific challenges in selling investments to investors. Here is a preliminary list to get you thinking:

• They have lots of alternatives (you have lots of competition).
• They have a plan (and you don't know what it is).
• They are hard to reach (and harder to characterize).
• The odds are against you (less than 1% chance per investor).
• Opportunities are expensive to explore (in time and money).

In short, it is a very inefficient market with inadequate support for the company seeking investment.

What about the platforms?

There are many platforms out there for connecting with investors. And they provide some level of service in that regard. Unfortunately, those platforms are also a very inefficient, but likely helpful and necessary part of your marketing effort for investment.

The trick with platforms is figuring out what to put there and how to use it to create connections. They do not allow you to target individual investors well, and more importantly, you have to be generic and cannot customize to the investor target (or even audience in many cases).

Also please note that each one (including ours) has it's own way of dividing up the dimensions of investor interest and investment.

Dimensions of investor interest and investment?

Yes, that's right. There are multiple dimensions at play.

• We start with things like raise amount (for you), check size (for them). You put in numbers or ranges, and perhaps so do they. But the reality is often quite different from the information provided.
• Then there are the things they invest in. There are lists of SIC codes or similar categories of investment areas, but they are not independent of each other, and not comprehensive, and investors don't put down the equations (e.g., SaaS AND ((Fin Tech AND $50K-$100K Ticket) OR (Sports AND MRR > $20K)) AND ...).
• Then there are the ranges of opportunities for companies. For example, one of our portfolio companies could take investment in the range of $1.5M to $20M today and use different amounts for different growth paths.
• The ESG criteria are often very confusing, among other reasons because different investors use different metrics for ESG. If they are into good environmental performance and don't acknowledge the full lifecycle of all environmental issues, that makes it easier - if you happen to hit on the right one. What's popular isn't always what they are looking for. Societal benefit for one group is different from another.
• Personalities are a substantial part of most investment decisions. Finding this out sooner rather than later will save a lot of time and effort. But there is no good way to find it out until you start to interact. Unless we are going to try personality-based AI characterization.
• There are plenty of other dimensions not well covered by platforms and that I won't discuss here.

So how do you go about it?

Selling to investors is a strategic and tactical marketing and sales effort. It involves all of the aspects of marketing and sales to customers, but requires a different focus of attention and communications approach to be successful. It involves a different knowledge base, different approach to customers, different tool usage, different processes, and so forth. The process and elements are more deeply described in the description of our service:

A call to action

If you want to start the push to get investors, we can accelerate the process. But the first step is to...

When you complete this process we will have the information we need to help start you down the path toward more investments of the right sort faster.

In summary

Selling shoes your customer base is in the billions and they want to but shoes several times a year. Selling investments in your company, your customer base is less than 100 people who are trying to avoid you. A different approach is called for.