Investors are Human Too
Dr. Earl R. Smith II
DrSmith@Dr-Smith.com www.Dr-Smith.com I recently sat in on a gab fest of entrepreneurs and wannabee entrepreneurs. Thesubject of investors and how best to approach them came up and I was taken aback bywhat I heard. If you listened to these guys investors were stupid, arrogant, greedy,short-sighted, overbearing, intrusive, difficult to deal with and distinctly neither arecognized nor welcomed part of the human race. Investors were the scourge of thebusiness world and responsible for most of the failures in it.What set me back were the obvious questions:
, if these people are this way, why would you haveanything to do with them?
If these people knew how little you thought of them, whywould they ever consider investing with you?Uncharacteristically, I held my questions and decided to ask the other side what they thought about the conversation. So Iorganized an informal session of investors and put the question to them. After I haddescribed the bitching gaggle and named the most prominent participants, here is a bit of what they offered:
eah, we know about these types. The grapevine beings us their names and wedont take them or their proposals seriously.
These guys are so busy ratifying their own provincial perspective that theynever see the process from ours. Most of them think they can simply present agood business plan to strangers and get a commitment on the spot. They treat us like an ATM
They are only one kind that I see the majority, to be sure, but not the onlykind. Some the very best of them learn that they need to get to know us andlet us get to know them. They approach us as serious people and work establisha relationship based on trust and mutual respect.The last comment echoed something that I have been telling founders for years.
ouneed to start a year or more in advance to establish relationships with potentialinvestors before attempting to raise capital from them. Most investors respondprofessionally to this possibility; that is to say, they either pursue or turn away fromsuch approaches depending on how well the founders and their value propositionresonates with the investors interest. This process takes intelligence, sound judgment,planning and perseverance. The founders who misses the boat tend to have the ATM