As we navigate through fundraising waters like every good startup, it seems that every investor has something specific they want to see from us.
Whether it’s the hockey stick of growth, a solid management team, a quick exit, use of funds, etc., there are a lot of tangible things that every burgeoning company should be presenting when entertaining an investor.
But what about the intangible things? The unquantifiable aspects of a person or business that an investor is keeping an eye out for? Most of the time, if it’s not something tied to a number, percentage or milestone, an investor might be swayed to invest (or not) based on something they feel or see. Typically, these reasons are gut feelings and rarely shared.
I reached out to three of my favorite female investors to ask them what they are looking for beyond the numbers. This is what they told me.
Barbara Corcoran, Investor on ABC’s Shark Tank–
Barbara has a couple of internal tests she puts the entrepreneur through to decide if she wants to partner with them on a deal. However, the entrepreneur doesn’t know she might be passing or failing this test. Her first test is the “war” test. Barbara thinks about going to war. She thinks to herself, “If I had to go to war for 3 years, would I leave my two kids with this person? Would my kids be ok, well adjusted and safe when I return?”
Along with that test, she gives them what she calls the “lifeboat” test. She asks herself after a few minutes spent with them, “Would I want to be in a life boat with this person? Do I like them enough to be in a lifeboat with them? Would they go down with me, or throw me overboard to save themselves?” What is Barbara really saying? She’s saying she better instinctively trust you. She is looking for is an innate sense of trust that she either feels or doesn’t feel by following her instincts. She admits that it’s not an exact science, but she has always regretted not listening to her gut and it’s cost her money.
What does this mean for you? If you have any plan, big or small, to swindle or even bend the truth – don’t. Bringing on investors is like a marriage, they are a partner of yours and it won’t work without trust.
Joanne Wilson, Gotham Gal –
Joanne Wilson, angel investor in companies like Catchafire and DailyWorth, says she has a 24 hour rule. “At the end of the day you are investing in the entrepreneur when it comes to early stage investing so I stick to a 24 hour rule. After meeting with someone I give myself 24 hours to see if I am still loving the business.” Joanne really listens to her intuition when she considers investing in a company. She not only wants to feel comfortable, but she wants to be really interested and inspired by the business and the entrepreneur.
What does this mean for you? You need to make an impression. When you are presenting your business opportunity to a potential investor, you need to make the pitch and business as exciting so you are unforgettable. For 24 hours at least! You started your business because you are excited about the solution you are providing, the market you are serving or the product you have built. Make sure you are conveying as much enthusiasm as possible, so an investor is still thinking about you days later.
Barbara Bry, Blackbird Ventures –
Barbara Bry is a prominent investor in early stage tech companies. Barbara says, “I’m looking for an entrepreneur who has demonstrated relentless pursuit and passion for what they’re doing. In addition, I want to see that they’ve assembled a great team that is tackling something that is technologically difficult to do and has the expertise to do it.”
What does this mean for you? Woman up! Do something tough! Barbara wants to see an entrepreneur with the guts to take on a difficult but exciting opportunity with gusto. Having the numbers is great, but a savvy investor wants to see that you have the braun to take a big hit, try something “impossible” and the confidence to pull it off.