September 25, 2017 8 min read

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Raising capital for your start-up is one of the most difficult yet most important parts of being an entrepreneur. While not every entrepreneur will be in need of investors, every startup looking to raise money will need them -- whether that means venture capitalists, angel investors or personal investors.

Related: 13 Tips on How to Deliver a Pitch Investors Simply Can't Turn Down

A report from the National Venture Capital Association put the investment total for 2015 at $79.3 billion, the second largest amount in the past decade. In 2016, the report noted a 12 percent drop in start-up investments, to $69.11 billion. Despite the drop, VC investments in start-ups remain at historic levels.

So, if you’re an entrepreneur looking to begin searching for investors to start growing your business, here are eight steps to follow:

Create a game plan.

I mention this a lot, but the bottom line is, you can’t be successful without a solid plan in place. Every successful business transaction starts with a carefully developed plan. As an entrepreneur looking for investors, you need to include the following in your plan:

Establish the problem you’re trying to solve and provide the answer as clearly and concisely as possible.

Highlight the unique feature(s) that make this product or service stand out from the rest.

Use that selling point to develop a short elevator pitch that lasts, start to finish, less than 118 seconds.

Identify future milestones and calculate how much capital you need to raise.

Milestones aren’t a one-size-fits-all for everyone. They will depend on the number of customers you have, the number of users, user engagement, financial metrics such as cash flow or revenues and product launch dates. Be optimistic about what you’re asking, but also be realistic.

Related: The 7 Elements Investors Look for in Your Funding Pitch

When asking for money, remember that you need to have three things in place for your investors:

A proven team A sizable market to target A product or service interesting enough to align with investors' "thesis" of your product

Visual is always better.

We’ve all heard the saying, “A picture is worth a thousand words.” A picture or any visual image can say more about your product than just a bunch of words on paper. Investors like to see something tangible that can help them understand the intricacies of the product you’re trying to get them to invest in. Whether it’s a PowerPoint presentation, animation or short, introductory video highlighting special features, this will help you stand out and make your pitch memorable.

It doesn’t have to be something elaborate, involving a ton of production hours, but it has to be visual enough for them to understand why you’re asking for money; and it has to be compelling enough for them to part with their money. It need not be a finished product, either, just enough of a prototype to help them visualize -- and understand – what you’re trying to sell them.

Use a business development approach.

In my years in business, I’ve done my fair share of business development; and, to this day, I still do. My motto is "ABC -- Always Be Closing," as they said in one of my favorite movies, Glengarry Glen Ross.”

If you know anything about business development, you know that closing doesn’t always mean "immediately." This is a long, drawn-out process that takes time and patience. On average, you could spend anywhere between three and six months working to close the deal. During this time, you must be clear about not just your company’s value proposition, but also the focus of any VC you’re planning on talking to.

Work all your contacts in order to get an introduction to those investors you want to reach out to. Think of this process as trying to become a member of an exclusive club. In order to get in, you need to reach out to the right people, get introduced, work those relationships and then enjoy the results. Never, ever show up unannounced or send unsolicited emails. That’s the quickest way to fail.

Target the right people.

If you’ve read my book, Think Big, Act Bigger, you’ve heard my speech about perfecting your "118" -- eight seconds to hook people and 110 seconds to reel them in. It’s the same with investors.

We’re all busy people and you’ll only have a short window to address your potential VCs. However, not all VCs will be interested in your approach. If you’ve scheduled ten investor meetings and six of them fall in your wheelhouse, target those first. You might be able to turn one or two with a persuasive pitch, but if you don’t target those of most value to you, you will be wasting everyone’s time.

However, if you feel in your gut that your product will disrupt the industry as it stands today, you have more power to make your potential investors move faster. After all, no one likes to miss out on a good deal!

Meet the right people.

Networking is constant. Even when you’re standing in line for coffee, you are networking. You never know if the person in line behind you can be a potential opportunity for you -- or knows someone who could make things happen for you.

Co-working spaces can be a way for you to expand your network. Our New York office shares space with a number of other companies -- all started by entrepreneurs looking to make things happen for themselves. They’ve come to our C-Suite Network conferences and mingled with a few c-suite leaders and investors. At these events, a simple introduction can lead to an invitation to join an accelerator program, which tend to be difficult to get into. Better exposure leads to greater connections. It’s all about whom you know.

Practice makes perfect.

Again, not a new concept, but one that never seems to get old. Setting up multiple meetings is only half the battle, so pace yourself. In order to make an impact, you need to:

Have realistic expectations -- because chances are you’re not walking away from any of these meetings with a check in hand.

Do your homework and know whom you’ll be talking to. If you have a hobby in common with a potential investor, use that. Everyone likes to interact with like-minded individuals.

Be ready for questions -- have someone pepper you with tough questions prior to your meetings. Practice those answers because you will get tough questions.

get tough questions. Remember your goal -- get a second meeting. Be prepared to ask, "When’s our next meeting?"

Tell your story.

Many people make the grave mistake of telling people what they like to hear, thinking this will get them somewhere. It won’t. It comes across as inauthentic and will jeopardize your chances at getting people to invest in you.

Telling your story, and only your story, should convey your passion, dedication and vision about the product. Forget business for a second and think about something you’re passionate about -- comic books, movies or coffee. For me it’s hunting, bacon and family. I get excited talking about my favorite subjects, and that passion carries through, even when I’m talking to people who hate hunting or don’t eat meat. That’s genuine. Your story should sound just as genuine.

Be persistent.

It’s perfectly okay to follow up after a few days or even after getting a "no" the first time around. If you get a "no," ask "why." One investor's feedback might be invaluable as you move on to the next one. If the investors are on the fence about you, keep them updated on the progress you’re making with your product. It’s perfectly fine to keep the lines of communication open; just don’t be annoying about it.

Related: The One Question You Must Be Prepared to Answer When Pitching Investors

If you follow these steps, are savvy enough and have put a lot of thought and effort into making sure everyone understands your product, they’ll show you the money. If they can see through you and it’s evident that their money is all you want, the only thing they’ll show you is the door.