Finding Investors is no Numbers Game

I received an email the other day about another investor matching service that has launched in Australia.

Don’t get me wrong – I appreciate such services and they certainly have their place in assisting business owners match up with investors particularly in the SME space.

Some actually advertise the 00’s of investors registered with their service and therefore perpetuate the notion that finding an investor requires exposure to many investors.

I think back to my days as a sales representative in the early 90’s where successful selling did lend itself to being a numbers game with the more folk who knew about my wears, the higher the likelihood that I’d stumble across people who actually purchased. This selling style still holds true for many product and services. My wears incidentally at the time comprised of mobile phones, or bricks I should say, and the role was a commission only sales role – one could never question my bright eyed and bushy tailed nature!

I am often asked “do you know investors?” This is followed closely by, ‘how many do you know?’

These are loaded questions to which I reply “yes,’ and ‘how many do you need?’

The false pretense is that if one presents an offer to a number of investors, one may stumble across someone who actually purchases.

To an extent, it’s always good to get a second or third opinion. However, my experience has shown that if one investor rejects an offer, it is usually for the same reason, or set of reasons, subsequent investors also reject the offer.

If two or three investors reject an offer, the proponents are wise to cease circulating the offer immediately and regroup with their advisors to reformulate the offer. Debrief with any investor and ensure this feedback is taken into consideration in any reformulation of the offer.

A fluid offer that incorporates the feedback of 2 or 3 genuine investors has a much greater chance of being fulfilled than a rigid offer circulated throughout the entire Australian investment community.

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