By: BreadStreet

Author: Hollis Doherty

So, you’ve got a great company, film, or idea and you think you’re ready to take it to the next level with some investment capital? Fantastic.

One of the first things you want to do before you approach investors, is look at your offering from the investors point of view. The primary concern of all investors is always the same… safety and returns. It is absolutely critical that you can show your potential investors that not only will they not LOSE their money; they will MAKE more of it.  Take a good hard look at your offering. YOU must be convinced that your investor won’t lose his money and will definitely make great returns investing with you. If you are not convinced of this, then you will not be able to convince anyone else. If you aren’t convinced they wont lose their money, then what you are asking for is a grant, and those are available. A grant is nothing to be ashamed of and may be exactly what you need. But if you are positive that your company, film, or idea is going to be massively profitable, then read on.

I come to this knowledge from years of experience raising funds via the private sector. I have raised money for multiple feature films with private placement memorandums, funds for natural gas drilling rigs in a general partnership, and I am in the process of raising angel investment capital for two feature films and one start-up company. Note: I said in process. It is a process. I speak to investors almost all day every day. There is a pattern to getting an investor to work with you and give you his money, especially when most of the sales process is handled over the phone.

The first things you need to establish with your potential investor are interest, liquidity, and control. Let’s cover interest first. Is he even mildly interested in what you are offering? I find that when I first approach an investor, I have only a few minutes to get that interest. You must cover his primary concerns immediately: safety and returns. At the top of what is called your pitch, you will introduce yourself, your investment vehicle, and immediately explain how it’s going to make a lot of money for your investor. I know you are in love with what you are offering, and when you find the right investor they will want to talk about it as much as you do. But at the top of the pitch, if you haven’t made it clear that his money is safe with you and will grow, and that he will see it again and then some, he has no reason to stay on the call. If he cuts you down right off the bat, I suggest you counter this with why your investment is so great and how he will make money. It’s called overcoming objections. So even if he says no, give him some reasons to say yes. If you try that a few times and he is still saying no, then let him go and move on. Don’t waste your energy. But you will be surprised how many times someone tells you they aren’t interested and after you have made even the slightest effort to convince them that they should be interested, you’ll find they are. One of the magic keys here is when you defend your investment and explain to them why they should be interested; you have exhibited confidence. Your confidence gives the investor confidence.

Once you have the investor’s interest you must establish liquidity. If the person on the other line says, “I ain’t got a pot to piss in,” I suggest you wish them all the best and let them go. If you are working with qualified leads this shouldn’t be a problem. Nonetheless, it is important that you qualify the investor for liquidity. Say something like, “After you’ve looked this over and gotten all the paperwork and done your research and let’s say you fall in love with what we are doing, can you be liquid for the amount we are asking for in the required amount of time?” If he has to sell a house to get liquid to invest with you; that’s not so great. Ask a few more probing questions to see where the money might come from. But if he doesn’t have it, it doesn’t matter how much he loves your investment, it’s time to move on to the next investor. But if he is liquid, fantastic, let’s move the sales process forward.

At this point there are two main things you need to do. Give your investor something to contemplate and establish control. Control may sound a bit aggressive but it doesn’t need to be. The idea of control is to make sure this investor is willing to work with you. The main way to do this is to get more information from him. You will need to send him your literature via mail, fax, or email, so now is the time to get that personal information from him. Get his second number. If you two are truly going to be working together, then this shouldn’t be a problem. If he doesn’t want to give you any more information about himself, and says just send me something and I’ll think about it, he could be brushing you off. Make an appointment to speak again. The process of establishing control with an investor is when you find out how interested he really is. An interested investor should be willing to give you more of his information so you can send him your literature, and should be willing to set up the next conversation with you so you can further discuss the investment.

These next steps after you’ve established interest, liquidity, and control are where the sale comes in. After your investor has your literature, you will have to speak again to answer questions and establish the relationship. For large amounts of money, investors want to feel like they know the person they are giving it to. This is when a face to face meeting is incredibly helpful. This is the time when you should express your passion for what you are doing. Ask your investor if they have questions and let those turn into great discussions about your offering. Ask them what concerns they have and give them great answers for their concerns. A key here at this stage is repeat repeat repeat. There is nothing wrong with you saying the same great things about your investment vehicle over and over and over again, they will start to finally hear you.  Now ask for the sale. ‘So, let’s move forward with this.’ ‘Can you write a check today?’ ‘I’d love to welcome you aboard.’ Find a way you feel comfortable assuming they have decided to do the investment and move the process along. If they object, cover the objection with a great answer and then ask for the sale again. Sometimes it takes a few objections before the sale happens.

All in all, sales is a process. You must begin this process with countless people before you will whittle it down to that perfect match of investor with investment. It’s almost like dating, you may have to kiss a few frogs before you find your prince. Be prepared to talk to a lot of people and start this process with a lot of investors before you find the perfect match!