Knocking on the wrong door and not being properly prepared after the right door opens are two of the biggest mistakes entrepreneurs make when seeking funds from investors.
Entrepreneurs in Residence executive director Greg Riebe says these errors have the potential to stop good ideas in their tracks.
“Entrepreneurs need to knock on the door that’s relevant to them and consider what capital or finance is relevant at the stage they’re at,” Riebe says.
“It might not be that yours isn’t a good venture, it’s just that your particular venture at that particular stage is not relevant to that investor.
“If someone wanted to sell you a vehicle but you’re only interested in going off road, why the hell should they try and sell you a Fiat 500?”
Entrepreneurs need to understand who the different players are in providing capital and finance and understand the language they use in terms of what they look for.
The other major mistake is not having a detailed plan to take to investors when they think they’ve found the right one.
“Now I’ve found the right door, I would need to give them a game plan relevant to them and show why it’s probable they’re going to achieve success,” Riebe says.
“So many entrepreneurs know what they want to do but they don’t have a game plan to actually outline how they’re going to apply that money, how it’s going to create the value and how they’re actually going to realise that success down the road.”
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