Do Investors Fund Ideas or People?
I want to talk to you today about something that’s near and dear to our hearts at Intelliversity. The human factors of funding. As investors who work with people that are trying to get an idea or concept funded, we are well aware of the importance of a business plan and a great pitch deck. The power of a well-articulated idea and the elements on the path to its success is undeniable. But often overlooked are the human interactions that make or break funding success.
There are many pieces to the funding puzzle. You’ve probably got your CPA, who makes sure all your numbers are right and those figures are ready for investors. You’ve worked with an attorney, and you’ve gotten your legal documents in order. Everything has been double-checking to make sure they are right – even impressive. You have painstakingly laid out your financial forecasts. A lot of effort and energy has gone into every detail.
You’ve invested time and money to be able to describe your concept or technology. People who aren’t familiar with your concept “get it” so you know it’s clear. All the components are in place. You are ready!
Wait! Are you ready?
What we would like you to consider is the amount of investment that you’re putting in on the human side. Is it sufficient to impress investors and earn their trust?
Let’s start with the team that is taking on the task to execute your plan. An investor wants to understand that your team is the right team to execute the plan that you’ve called out. That’s important. In fact, it’s so important that many investors will go with a lesser idea and great team before they go for a great idea with a weak team.
The team should be diverse. You don’t want to have all one type of person or for that matter one gender. Investors are well aware of the powerhouse that male / female teams can be (think Musk and Shotwell or Zuckerberg and Sandberg). If you are the innovator, you’re going to need an execution master. And no, you cannot be both. My eBook Born to Star – Secrets for Business Funding Success covers that topic extensively.
We’ve written a lot about that – it’s that important. In addition to the eBooks, there are blog posts. Go to our library or blog page. All that material is free. All that information is available for your review and perusal. We have invested a considerable amount of effort on the concept of team. We explore the power of diversity, the balance of innovators and execution masters, the important role of women in the C-Suite. That’s how important we know it is.
Another element has become apparent to us. The most important thing, maybe more than team, is trust.
After all consideration of your idea, business plan, and your team, trust is what causes an investor to pull the trigger. They trust in how you’ve put together the plan. They trust how you’ve put together the team but mostly, they trust YOU. They trust that with the proper resources, you are going to make this business a success and them a lot of money.
This trust factor is so important that we’ve built a whole program around it. It’s called the Fast Track to Funding. You can learn more about Fast Track to Funding on our home page Intelliversitycampus.org.
While you may understand that trust is important, engendering trust is a skill. It’s a learned skill. It is a required skill. You can never forget that the investors you are approaching are going to make their decision, either way, because of trust or lack of it.
Let’s assume we are all trustworthy. You know you are, but you cannot afford to assume that will be obvious to others. What we are talking about here is the master game of evoking, or engendering trust in others, particularly investors. If you are the innovator, what we call the Vision Master, you have an inherent discrimination issue. As the holder of the vision, the creative one, investors often see you as a dreamer, someone difficult to trust. Evoking trust could be the difference between getting funded and not.
If you think I’ve said trust too many times, trust me, I haven’t. Consider this; Trust ties together your technology, your financial projections, and your team. Trust is the magic bullet that makes your investment in your idea, the sweat, belief in yourself, accountants, lawyers and analysts come together.
So the answer to the question, “Do investors fund ideas or people?”, the answer is people. Investors believe in ideas, but they have to trust the people they invest in.
We’re a team of highly experienced business professionals and investors ourselves. When we say we are committed to getting you ready for the funding that your business deserves, you can trust that we mean it.
Like we said, there are many pieces to the funding puzzle. We can offer you the “top of the box” view. You are welcome to call us or go to our Connect page and set up a 30-minute consultation. There is no cost for our initial consultation. If we can help, we’ll tell you. If we can’t, we’ll recommend some next steps to guide you.