What is an investor?

What is an investor?  More importantly what kind of investor should you be looking for?

 

in·ves·tor

inˈvestər/

noun

noun: investor; plural noun: investors

  1. a person or organization that puts money into financial schemes, property, etc. with the expectation of achieving a profit. Investors come in all shapes and sizes:
  • Friends
  • Family
  • Angel investors
  • Venture capitalists
  • Retail investors
  • Banks
  • Funds
  • Unions
  • Hedge Funds
  • Etc.

So now that we know what an investor is, let’s explore what kind of investor you should be targeting, and how you should target them.

Let’s look at a few examples:

 

Reg A+ (Crowdfunding IPO)

Company: A popular build your own jewelry app

Amount looking to raise: $10 Million

Ideal investors: Individual retail, new individual investors, investment bankers, and fund managers.

Insight: Popular companies should always begin by leveraging their base of customers or subscribers because customers are more likely to invest, and if they invest they’re more likely to remain customers.  Then, run paid advertising in areas where your ideal investors would spend their time. Hire an investor marketing firm to help you identify “investor personas” and target them. Spend more time with a focus on individual investors as opposed to the larger investors because of the nature of the investment, not to mention, the more retail and individual investments you secure the easier it will be to find larger investors.

 

Small Public Company (Small-Cap)

Company: Pretrial Biotech

Amount looking to raise: $10 million

Ideal investors: Individual retail, new individual investors, investment bankers, and fund managers

Insight: Early stage biotech stocks sometimes have trouble finding investors because frankly most of them are pre revenue and carry with them an enormous risk. Usually, they are raising large amounts of money for clinical trials and FDA hoop jumping.  The best way to secure stable funding is to create a stable market.  This requires a large retail investor following.  Again, this is a job for an investor marketing group.  

Some tips to get you started on improving your investor marketing include:

  • Checking your Flesch-Kincaid score, getting rid of technical jargon and complicated speak that can confuse potential investors.
  • Explore investors that are invested in companies in your peer group, their better understanding of the industry will make your story more likely to resonate.
  • Get analyst coverage (even paid)

 

Most importantly…AGAIN…RETAIN AN INVESTOR MARKETING FIRM!

Start Up (Business Plan)

Company: Seafood Food Truck

Amount looking to raise: $150,000

Ideal investors: Friends & Family, Angel Investors, Bank, Potential for crowdfunding (KickStarter.com, GoFundMe.com, IndieGoGo.com).

Insight: Raising small capital for a passion project like a food truck is the ideal situation for traditional crowdfunding.  You can offer ‘investors’ a membership, your famous cheese dip recipe or anything you can think of to help get them incentivized to invest. Maybe that’s not the case. Maybe you have a solid business plan and a history of making good business decisions and have a good down payment for what you need, so you go to the bank or an angel investor. There are pros and cons to both strategies and I suggest you weigh out the options carefully. Lastly, you love to cook. Everyone says you make the best seafood and they ask for it all the time. Ask Mom & Dad, Uncle Pete or your Nana. Maybe your sister’s boyfriend or the neighbor (personally I’d go with your daughter’s boyfriend, you have a lot of leverage in that situation). If your food is that good they will be happy to invest in you and your dreams.

 

I hope this has helped you identify what an investor is. But more importantly what investor is for you.

 

If you have any more questions please feel free to contact us anytime. Ask for me, Jason, directly. Especially if you make good seafood. I love seafood.

Good luck!