Fact has it that money is among the major things we need to start a successful business but what if the money is something we do not have? What do we do? This is where we seek for investors, right?.
Regardless of the amount we need, be it a thousand dollar ($1k) or even a million dollar ($1m), there are some things we need to put to table before approaching anyone just to protect our ideas from getting stolen and to avoid rejection as well.
Here are three things you must do before you contact an investor.
Make Sure Your Idea(s) is/are protected.
Yes, I know what’s on your mind. How do I protect my Idea from been stolen? Am I right? Of course you can, there are several ways to do that which I will be listing few of them.
- Use a Non-Disclosure Agreement
How does a NDA works? It gives you total control; you can spill out whatever you want to and still have the ship under your control. A Non-disclosure agreement protects your idea before you show or reveal it to your potential investors or people you want to employ as well. Be prepared because most investors will refuse or hesitate in signing a Non-disclosure agreement before they hold any conversation with you. Regardless of how desperate you might be, you don’t have to succumb unless you are really, really desperate which they can use against you if they find out. The Non-disclosure agreement works in every aspect, you could use it for clients and your employees, not just your potential investors.
- Patent Your Idea
This is another means of getting your idea protected from theft. Since some investors will disagree on using the Non-disclosure agreement, worry less, patent your idea and everything else will be intact. However, you need to know that Patent is totally different from Copyright while the both are different from Trademark. Read more about Trademark, Patent and Copyright. For more information about Patents you could read this as well.
- Do your Research
Regardless of how popular or trust-worthy your potential investors, clients or employee might seem to be don’t forget to make a research on them, they might have done something really terrible that could hamper the image of your business but little will you know, if your researches are solid you will find out everything about their past and present.
Who do you wish to have as your Investor?
Do you have a list of Company, Organization or an Individual you wish to have as an investor? If your answer is no, then take a sheet and draw your list, also add why you want them as your investor. With this you will be more opportune to have a very strong or tangible reason of having them as your investor which will also make things easier and quicker.
James Geshwiler said that “Most business owners can only carry on conversations with only a maximum of six potential backers at the same time”. So while coming up with your list make sure that at the end you have nothing more than six potential investors on the list. You could as well have a backup list so that if one decline’s you can select another one from the backup list till you find your solid six.
Kill the Doubt by Deploying a Team.
A potential investor, most likely wouldn’t want to give you a fund if they realize you work alone, their doubt would be “Can he do It all alone?” Nevertheless, if you could still handle the task alone, build a team.
According to Larry Kaplan “Investors want to have a gut feeling they can trust you and your team”. Therefore, while assembling your team make sure they have a sense of what you’re doing and can predict and assure your potential investors of what the growth of your business could be in the nearest future, also, make sure they’re hard working and dedicated people like you (If you’re).
Share your views and experience by using the comment box.
2 thoughts on “3 Things You Need to do Before Contacting an Investor”
You’ve really shared some interesting tips. But from where I am coming from, it’s really very difficult to patent an idea. That fat civil servant will loom at you up and down and show you the way. Hahaha!
Thanks for dropping by Emmanuel, depriving someone from his or her legal rights is quite frustrating! I hope that changes soon.
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