Building Relationships with Investors

The importance of relationships with potential customers & investors (angel investors and venture capitalists) is often overlooked and under-minded by Entrepreneurs looking for funding.

The fact is, relationship building with these investors and customers (yes, prior to even having a product released) is very important. Traditionally speaking, most Entrepreneurs assume cash first…than customers. But really, cash (investors) comes hand in hand with customers.

And..if you’re one of the millions of Entrepreneurs stuck in the “fundraising cycle” it’s a good way to get out of it..and get your start up funded. If it’s AUTHENTIC relationship building…

Here’s the how’s and why’s of Entrepreneur relationship building, and what it means to potential Investors:

Start Relationship Marketing during the Seed Stage with Your Future Customers

It takes just a little bit of time, and a tiny investment of cash to get busy marketing. With Facebook and Twitter, it couldn’t be easier and cheaper. Start building a relationship with your future market, you don’t even have to have a product to sell yet. If you start marketing now during the seed stage, there are several benefits to a potential seed stage investor:

◦You show persitance. Your startup isn’t waiting for an angel to swoop down out of the sky.
◦You’re developing a brand and building a social media reach, making future marketing efforts easier.
◦Your proving your market exists, and you can reach them.
◦Beta testing users! If you already have a relationship with your market, many will be more than willing to beta test your product.
More importantly, you’re giving potential seed stage angel investors insight into who you are as an Entrepreneur, and put a critical “real life” feel to your start up.

Start Relationship Building with Angel Investors and VCs during the Seed Stage

I actually suggest starting relationship building with seed stage investors (and larger scale VCs) prior to looking for funding. But if you’re already looking for funding during the seed stage, start building relationships with Venture Capital firms that target Series A and Series B. Let them know “I know I don’t meet your criteria at this point in time, but I hope to build a long term relationship with you and get to know you”.

The benefits of building these relationships, even in the seed stage:

◦You get to know one another. Venture Capitalists and angel investors say the most important factor in funding is…you & their relationship with you.
◦When you reach the Series A Stage or Series B, you’ll already have the connections for the funding round.
◦If they like you, the Venture Capital firm may make an introduction to a smaller angel that meets your stage.
◦They may make an exception for your start up’s funding seed round