1. Meet people beforehand. It is usually a good step to meet your to-be-sponsors before you actually ask for their financial support, as this bulids some amount of familiarity and trust between both parties and makes it easier for them to render their help to someone they already know rather than a total stranger
2. Build your startup capital early. You need your own resources to start your ventures without the need for external capital. This makes the sponsors more at confident about the venture they are injecting their money into
3. Be in an investor in your own business: build up your own capital, invest a little, then reserve some for follow-on investment in your own venture. Having capital set aside means you can continue to invest in your venture and leverage it into additional equity capital or financing from external investors later on, if you so desire. Being able to present the opportunity to co-invest alongside you, the founder, is a far more compelling and attractive story. In Integrated Investing, I devoted a chapter to the mindsets that help people think like investors.
4. Learn the language of finance. Get comfortable with numbers, accounting, and financial terms. From return on investment and internal rate of return to dilution and cap tables, learn what these terms mean and why they are important. Know the difference between burn rate and run rate. Know your debits from your credits and understand the different information that is told by your balance sheet, income statement, and cashflow.
5. Be versed with knowledge of the legal inclinations of running a business: In addition to understanding numbers, I have always found understanding the legal documents associated with funding to be an advantage in negotiations. Whereas financial models tell the story of an investment opportunity in numbers, legal documents tell the story in legalese. I’m able to give anyone an overview of the legal documents they are about to enter into. I caveat that I’m not a lawyer and encourage people to get legal advice. I encourage people to have legal documents independently reviewed by a lawyer, but that doesn’t absolve me from understanding, in general terms, what is in the documents. The number of times I’ve encountered entrepreneurs who have no idea what’s in their documents is too frequent to count and it’s scary.
6. Be your best, most informed self and trust that there are aligned investors out there. Increasingly, there are investors that truly value what women entrepreneurs contribute to the economy and society. Be informed and be yourself. Seek out investors that are aligned with your vision, that will champion you, mentor you, and be a partner in your venture. The need to conform to a particular pattern familiar to some investors is becoming less and less prevalent. The investor community is becoming more diverse and therefore the goal of attracting funding is becoming about fit, complement, and alignment.
7. Have an exit strategy Exit is the time and way we can realize our return on investment. Exit is when an investment opportunity is ready to be passed on to another investor. Entrepreneurs may or may not exit at the same time as investors. Research how other ventures and investors have realized exits. Get versed on mergers and acquisitions activity in your sector and develop a credible exit strategy.