Attracting investors is a marketing art and science. As Transamerica’s youngest-ever partner, Tom Larkin examined, modeled, and invested in several thousand companies. He’s been involved with entrepreneurial pursuits for the past 6 years including his current role as co-founder and CEO of the e-commerce marketing platform Social Rebate. Drawing from his experience on both sides of the handshake, Tom offered his “5 Tips for Attracting Investors.”
1. Focus on developing your idea – Understand the problem you’re solving, recognize your market size, and identify the most effective channels to that market. And most importantly, do one thing well; solve one problem not a set of them. Facebook may be a jack of all trades now, but it had to nail the connecting friends part first.
2. Be nimble—Investors like to see passion but it should be tempered with flexibility. Be willing to take feedback and tweak your model, especially in the early stages of attracting investors.
3. Know your competition – Stay up on the VC blogs and be familiar with other players in your space. Be honest about your competition in speaking with investors. But also be prepared to explain how you’re different when you are working on attracting investors.
4. Perfect your elevator pitch and get it out there – Start out your pitch by introducing yourself and immediately addressing the problem you’re solving. Then, offer your company’s solution to that problem. Make sure you can point to a tangible example(s) of customer successes. And above all, leave them wanting more when attracting investors. The elevator pitch should peak an investor’s interest, not give away the farm.
5. Be realistic about your valuation – Fired-up entrepreneurs have a tendency to believe their idea is worth more than it is. A savvy investor can sniff-out unrealistic valuations, so do your research and offer a realistic price tag. Early Stage investors are taking a huge amount of risk. They need to be amply compensated for taking the leap.
Remember these attracting investors strategies when you develop your pitch.
About Tom Larkin
Tom Larkin is Co-Founder & CEO of Social Rebate, an e-commerce solution that converts customers’ purchases into Social Media marketing. Prior to starting Social Rebate, Tom was the youngest partner at Transamerica, earning the Principal designation at 26. Tom co-managed two top-performing small cap portfolios, and was the lead analyst for over a third of the economic sectors covered in the company. He has been involved with entrepreneurial pursuits for the last 6 years.