Josh Melick is a startup whiz-kid, having successfully started Broadly.com, which has raised over $30 million in funding, making it one of the top 10 fastest-growing companies. Previously to starting Broadly, Josh was part of various successful startup acquisitions, including Demandforce by Intuit, Ingenio by AT&T, and MxPlay by Smith-Micro (where Melick was also a founder).
Including his experience in the startup world, Melick has been an engineer, project manager, and salesperson at various companies. His success in starting Broadly is found in product design and extensive knowledge of raising investors’ money for startups.
In this interview, he goes through 10 tips to get investors to back your startup.
1. Be Accountable:
When you pitch people constantly, they expect to hear something favorable soon or lose interest. So a CEO must be accountable and responsive. Investors want to see that the CEO can execute and follow through on what he says he’ll do, especially if it’s in a short period of time.
2. Research the Investor:
Learn about an investor’s background. What they are interested in, what they’ve done in the past, and what their current portfolio consists of. There’s nothing worse than pitching someone who doesn’t know anything about the company or industry you’re talking about to them. Show that you have done your research beforehand.
3. Build a Killer Product:
If you can’t deliver a product or service that is ready for market, it will be challenging to convince an investor to buy into your vision. So instead, build the best product possible and include integrations with other products they’re already using – it’s easier for them to say yes then.
4. Have a Strength:
An investor doesn’t want to back a company that’s average in everything – they need to see your company excel in at least one area. For example, you may not be able to convince an investor that you’re the best at outbound sales and support, but you could say you have a great product with a large market for it.
5. Get Everything Ready:
Before you approach investors, be ready to go. Have all the necessary materials prepared and organized so you can send them quickly upon request. Things like financial documents should be readily available online, so they don’t have to ask for them multiple times. Invest some time upfront in getting everything together before doing any pitching.
6. Have a Plan B:
If things don’t work out with one investor, have other options lined up. Nothing is worse when you’re trying to close an investor, and they say no multiple times, which kills your momentum. Have some backup investors if that happens, or even better yet – line up the funding with various people before starting any pitching process.
7. Have Partners, Not Employees:
Investors are always looking for the next big thing – something different from everyone else. Partner with companies with a lot of potential and show an investor you’re willing to work with others to achieve great things. It shows you can bring value to their company too.
8. Don’t Make it Personal:
It’s business, not personal. Approach pitching as if you’re talking with a robot and leave human emotion out of the equation. If investors find you making things personal or find your pitch scattered, they’ll be less likely to invest in the company.