{"id":41501,"date":"2023-10-20T15:14:26","date_gmt":"2023-10-20T15:14:26","guid":{"rendered":"http:\/\/startupsmart.test\/2023\/10\/20\/when-to-pop-the-question-will-you-invest-in-me-startupsmart\/"},"modified":"2023-10-20T15:14:26","modified_gmt":"2023-10-20T15:14:26","slug":"when-to-pop-the-question-will-you-invest-in-me-startupsmart","status":"publish","type":"post","link":"https:\/\/www.startupsmart.com.au\/uncategorized\/when-to-pop-the-question-will-you-invest-in-me-startupsmart\/","title":{"rendered":"When to pop the question: Will you invest in me? – StartupSmart"},"content":{"rendered":"
\"\"<\/div>\n

I get a lot of people asking me when the right time is to reach out and pop the question. Will you invest in me? This question has a complex answer and founders need to study a few key indicators when answering it.<\/span><\/p>\n

1. Traction<\/h3>\n

This is an obvious one but it’s often overlooked.<\/span><\/p>\n

There are many times when founders pop the question, albeit with bravado, way too early.<\/span><\/p>\n

You need to be able to demonstrate significant traction relevant to the sort of investor you’re targeting.<\/span><\/p>\n

For friends, family and the like you may need little more than an app prototype, some early stage email signups and drive.<\/span><\/p>\n

But for smart money like proper angels, venture capitalists, and private equity investors you’re going to need to be able to demonstrate a whole lot more traction.<\/span><\/p>\n

They are looking for things like paying customers, large growth numbers and intelligent financial management.<\/span><\/p>\n

The key is to investigate what the investor looks for and make sure you cater to their needs before popping the question.<\/span><\/p>\n

2. Relationship<\/h3>\n

I’ve written about this one before and I believe it to be very relevant.<\/span><\/p>\n

If you ask for money you’ll get advice and if you ask for advice you’ll get money.<\/span><\/p>\n

Very few people succeed by asking for money off a cold pitch, not unless you’ve got some Facebook-like growth.<\/span><\/p>\n

Investor’s invest in people they trust and you need to earn this trust.<\/span><\/p>\n

Sometimes it may take many coffee meet-ups, formal meetings, and catchups before the relationship is ready.<\/span><\/p>\n

I feel it’s much easier to convert a mentor or advisor into an investor than a cold lead.<\/span><\/p>\n

So start your relationship out that way and work up to the investment.<\/span><\/p>\n

3. Founder Prowess<\/h3>\n

Are you personally ready for the rigours of investment?<\/span><\/p>\n

If it were a walk in the park you’d see many more seed rounds.<\/span><\/p>\n

As a founder, you need to know everything about your business inside and out.<\/span><\/p>\n

Every question has an answer ready and nothing catches you off guard.<\/span><\/p>\n

When you pop the question and the rebuttal is fired you must be able to answer without wavering.<\/span><\/p>\n

I suggest watching tons of investors speaking, founder pitching and general Q&A on Youtube.<\/span><\/p>\n

Try and get someone friendly in the space to grill you as well!<\/span><\/p>\n

4. Legal Readiness<\/h3>\n

Apart from yourself and your relationships, you need to be legally ready.<\/span><\/p>\n

Do you have the right documents like shareholder agreements, term sheets or the numerous others?<\/span><\/p>\n

This needs to be all pre-loaded by your lawyer.<\/span><\/p>\n

Time kills all deals and investors can get over the initial thrill.<\/span><\/p>\n

Make sure you work with your lawyer to structure everything ahead of time so it can be provided very quickly to close the deal.<\/span><\/p>\n

If you tick all the boxes and your gut instinct says it’s time, go and raise that round.<\/span><\/p>\n

Thomas Szmidel is a senior product strategist at Appster.<\/em><\/p>\n

Follow StartupSmart on<\/em> Facebook,<\/em> Twitter and LinkedIn.<\/em><\/p>\n","protected":false},"excerpt":{"rendered":"

I get a lot of people asking me when the right time is to reach out and pop the question.<\/p>\n","protected":false},"author":2,"featured_media":60853,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[20,1],"tags":[],"_links":{"self":[{"href":"https:\/\/www.startupsmart.com.au\/wp-json\/wp\/v2\/posts\/41501"}],"collection":[{"href":"https:\/\/www.startupsmart.com.au\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.startupsmart.com.au\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.startupsmart.com.au\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.startupsmart.com.au\/wp-json\/wp\/v2\/comments?post=41501"}],"version-history":[{"count":0,"href":"https:\/\/www.startupsmart.com.au\/wp-json\/wp\/v2\/posts\/41501\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.startupsmart.com.au\/wp-json\/wp\/v2\/media\/60853"}],"wp:attachment":[{"href":"https:\/\/www.startupsmart.com.au\/wp-json\/wp\/v2\/media?parent=41501"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.startupsmart.com.au\/wp-json\/wp\/v2\/categories?post=41501"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.startupsmart.com.au\/wp-json\/wp\/v2\/tags?post=41501"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}