Acquiring funds during the start up phase is one of the more painful tasks that must be successfully accomplished. It has been found that the first set of targets for funding consists of friends and relatives. Funding institutions, lenders and capitalists in different forms come second on the hierarchy.
Lot of ink has been used in writing & print about ways of attracting institutionalized lenders. What about attracting individuals like friends and relatives? The principles applicable in case of making presentations to institutional lenders don’t work well for friends and relatives.
Let’s look at this way. I am a person with money showing some readiness to invest in my cousin’s business, and also assume that I don’t belong to management and marketing consulting. I am just a next-door neighbor working 9 to 5 type. And I am a potential investor. Should I look into the facts and figures with 5-year projections? Or should I look into the products and apply my common sense on whether the prospective products are saleable in the market? I think, I may get impressed with a beautiful flash presentation, but my confidence will be built on the ‘physical evidence’ showcased by the future entrepreneur.
Here lies the key. Try to impress your prospective investors with some physical evidences, and stress less on figures, charts and graphs.