Scott Levy

Resultmaps.com

4 min read

Without knowing it, you’ve probably been courting your first startup investor for years.

This is good news or bad news, depending on how you treat people.

Here's the deal: for many of us, our first startup investor is someone we worked with previously, a friend, or possibly even a family member. It’s true of my paternal grandfather, a Latvian immigrant who came here as a teenager with no English and a funny sounding name. It’s true of friends of mine who have started and exited big name internet companies and services firms. It’s true in my career, and it’s true of the majority of the founders and startups I meet.

Unless you are running an established business with a significant history of cashflow, that first investor is likely going to come from a pool of people who can gauge your history: friends, family, co-workers, or mentors.

For that reason, as mentioned above you’ve laid the groundwork for getting that investor already, and it has everything to do with your past behavior. This can include behavior toward this individual or the results from any collaborations in which you’ve both shared.

There is a corollary here - see this individual's buy-in as the next step in a relationship that will last well into the future for mutual benefit.

If your job is to build a great relationship with investors, the upside will exceed the money and pay dividends beyond the exit. See beyond the transaction and think in terms of the “big picture”– it changes how you interact with everyone from interns to investors, and it builds positive momentum that can carry through difficult times and into future successes.

What happens when you focus on building relationships instead of a one time transaction?

For one thing, your negotiations can take on a collaborative tone, which is far less distracting than being adversarial/transactional.

It’s hard to overstate the value you can get from a meaningful, trust-based relationship. It may sound like syrupy hoopla, but the effect of our networks on our lives and careers is profound.

Like any great team, when we can work through challenges together successfully, we build trust.

What if no one in my current network will invest?

It may be that you need to expand your network and get to know others, because you may not have accredited investors in your network. It also may be that you need to rethink how you treat people, and what unstated rules you have for dealing with them. Get a mentor or four; go volunteer. Or, perhaps your idea needs more objective validation (i.e. "sales" and real customers).

Pro Tip: Give and Take by Adam Grant is a great read on building value

What if my idea is so ground-breaking it will take years to develop?

It might be best to self-fund until you get it to the point that others can clearly see the vision, see it work, and see some data being adopted. If you’ve never raised money before in order to build something like this, it’s highly likely you don’t know what you're in for, and that, even though you are the one guy or girl who is going to Zuck this one, no one will be able to distinguish you from the millions of others who are going to get their teeth kicked in.

These links take you into more nuts and bolts in terms of building relationships, and thinking about your startups funding and scaling.

Give and Take by Adam Grant, on getting past “taker” and “matcher” thinking.

Raising predictable capital - GrowthX co-founder and Managing Director Andrew Goldner.

Finding product market fit GrowthX co-founder Sean Sheppard.

Here is more about how startups are really getting funded, by GrowthX co-founder and Andrew Goldner: Inc magazine.

written by Scott Levy

Scott has decades of experience as a design-thinking founder, CEO and business development professional. Prior to joining GrowthX and founding ResultMAPS, Scott founded W3MG, a product design and management firm with a diverse portfolio of clients ranging from startups to the Fortune 500. Scott has helped dozens of companies craft ‘real life’ approaches to uncovering and satisfying customer needs resulting in an increase in usability, adoption and buy rates.

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