Finding the right investors to back your company, especially in the early days, can accelerate your path to success. However, this isn’t something that just happens overnight. Securing an investment requires a lot of preparation. Before you start reaching out, there are a few key steps you need to take.
I spoke with Nick Spina, Founder & CEO of Ethey, a zero-waste meal delivery company backed by Gary Vaynerchuk, to find out how he was able to secure investments and grow his business.
Know what sets you apart from the competition.
Spina is building Ethey to become a completely sustainable zero-waste business. Everything that the company does works to support this mission, from product packaging to the facilities themselves. Spina explains that “all of our packaging is fully compostable, reusable, and even consumable. Going forward, our ice packs will be made of juice, so you can actually drink them with your meal, as opposed to simply throwing them out and having them leach toxic chemicals as they break down in a landfill.” Spina didn’t stop there, but went even further by creating a zero percent food waste facility. There’s a 30,000 square foot worm farm in the basement where the worms eat all of the food scraps, then produce worm castings, which are in turn sold to farmers as fertilizer.
These extreme efforts in sustainability and future-forward thinking set Ethey apart from the competition. It’s important to not only find these differentiators, but to highlight them and ensure that they stand out when you’re pitching an investor.
Truly understand your customers.
When you truly understand your customers’ needs, you can have great product to market fit. The right product to market fit creates the opportunity for your company to exponentially. This is a key point that investors look for, and being able to illustrate that when you’re pitching can go a long way in getting investments. After all, an investor is investing in the future, so if you’re able to show them that the demand is there and you’ve already tapped into the right market, your company will become a much more attractive option.
Perfect your pitch.
You won’t have long to capture an investor’s interest, so you have to have a strong and well-delivered pitch. You don’t need a fancy slide deck or elaborate presentation, what you need is a rock-solid pitch. A strong pitch can stand on its own, and simply be supported by slides or other visuals. Your goal should be to create a pitch so strong that it doesn’t require visuals to convince an investor to come on board. Spina pitched his company to Vaynerchuk over the phone, and his pitch was so compelling that that call was all it took for Vaynerchuk to become a partner and investor.
Find the right connections.
Like nearly everything else in business, it’s all about finding the right connections and not being afraid to reach out. Spina did this by reconnecting with a former employee that he hadn’t seen in close to six years. That employee ended up having a direct connection to Gary Vaynerchuk and was able to make an introduction.
While you may not be able to find a direct connection so easily within your immediate network, you might be surprised by who’s connected to who in your extended network. You’re likely only a few degrees of separation away from someone who would be a great investor. Work your way up the chain, asking people to make introductions for you, and don’t be afraid to be persistent. Remember that every time you’re reaching out and making a new connection, that’s another person who now knows about your company and could potentially link you up with someone you weren’t even aware of.
Never hesitate to ask for something.
“You don’t get what you don’t ask for,” says Spina. “Just go out and ask, you have nothing to lose.” After all, the worst thing that could happen is being old ‘no’, and the best thing that could happen is a major investment in your company. Quite frankly, getting told no isn’t entirely a bad thing – it simply means you need to refine your pitch, get clearer on your messaging, or find someone who’s more aligned with your mission. ‘No’ is a learning tool if you take the time to reflect on the reasons behind it.
Just get started.
“If you have a vision and you believe in something so much, you should absolutely go after it, regardless of who might tell you it’s not a great idea. All you have to do is get started. You can figure out how to take the next steps as you go,” advises Spina. Once you take the leap and get things started, you’ll have more energy and drive to keep the momentum going.