What to ask/say to potential private investors?

11 Replies

I am having coffee with a wealthy man who I know at least dabbles in REI as one source of income and was a successful business owner before retirement.

The meeting is under the premise of "picking his brain" for information/advice regarding my plans, in lieu of my providing him web design & marketing services for his retirement business. He offered to pay, I said I'd rather talk with him.

Does anyone have advice on things to ask/say without sounding sales-y or directly asking for anything. My goal is to open up a dialog for the future, be it for private money, mentoring, or real estate referrals from wealthy friends. (His retirement business is one that cost hundreds of thousands of dollars, so he makes contact with lots of other wealthy people)

Would it be too presumptuous to bring our business plan etc? 

@William Boudle the #1 thing I see on the forums about private lenders is how to talk to them, how to ask them for money.  Your best thing to do is to prepare your "elevator speech" and why they should invest in you.  There have been some blog posts about private lenders; those you should definitely check out.

@William Boudle

I would say this. During your first few meetings say nothing with regards to your real estate interest and certainly do not mention you are after obtaining money from him. Give your entire attention to his present business needs, show you concern for his business and interest in him personally. You want to establish a relationship. 

Ask him about how he became successful.  Successful people love to talk about how they made it.  Ask him what he would do if he was starting over at a young age.

Think about what you can do for him, not what he can do for you.

If this is your first meeting, DON'T SELL ANYTHING OR ASK FOR ANYTHING.  Your only goal should be to get to know each other and make a good impression.   

If the meeting goes well, tell him you really enjoyed hearing his story and would it be okay to stay in touch?  That's it.  

Thanks guys!

Account Closed I really like the what would you do if you were starting over at my age (I like to think I'm young!) 

 You've hit the nail on the head. I'm just trying to establish a relationship. For some reason that seems harder to me than a sales pitch would. For a sales pitch I could provide numbers, charts, sales sheets etc.  But what I really what to convey is, "I would like the financial independence your life provides you and is there any guidance, beyond the cliche, that you could provide to help steer me down that path?"

I am a lender and would assume that if you are taking me for coffee you also want something. It is great if you have a skill that will help him. Volunteer to help him. Recognize that if the you want or need financing that it should be win win. You have a profitable deal then he can win by financing the deal and you should profit also. He is not giving you money for free. He should be willing to advise you on the deal. If it's not a good deal he will advise you why. If he is in the business he should be happy to advise you on his criteria. The point to remember is that if you are bringing him a good deal you are bringing value.

You are talking about a private lender, someone you would include in your circle of privately and personally known people to you. Now if you were talking about a HML then that person is in the business of lending money and maybe has already set a schedule of how much time he or she is willing to give anyone looking to borrow money from them. They would expect you to talk about your business and reasons for a loan immediately and expect you to have things like a business plan, charts and all the data you are relying on to determine you can operate and therefore use the money profitably. They may not really care that you are a respectful person or as considerate of anything in their personal life. They want many people to come to them for money. A private person would use personal criteria more than simple business reasons to deal with you.

Not that a HML would not have personal reasons or preferences but they are playing a numbers game and the more people go to them for loans the more money they can expect to earn, their motives are more geared toward profits than personal satisfaction and they are also completing with Joe lender down the street where as a private lender is not so dependent on lending their money but maybe open to the idea of it.

I just want to follow up with my meeting for those of you who answered. 

This was not a meeting for me to get something out of it, other than his time and advice and an open door for future correspondence.  I.e building that circle of trust, so the option for private money is available later, without asking for it now, for now I will use hard money. 

We had coffee and he gave me two hours of his time and some great advice, though not necessarily what I wanted to hear! I laid out my elevator pitch and was honest about my current and future plans. 

He thinks I should scrap my "dream plan" and go for the opportunities I have right in front of me. Bird in the hand, forest for the trees, move the target closer, that kind of stuff, lol. Basically, like Robert Kiyosaki, he said it boils down to cash flow and laid out how I should increase cash flow sooner vs later. 

His advice was sound and honest, but sometimes it takes an unbiased third party to point out the obvious. Especially when there is emotion involved.

But best of all, he reached out afterwards to ask how the discussion went with my wife, and told me to keep him informed of how my discussion goes with my father (who's business he suggested I talk about taking over). 

So did I open the door to further discussions and begin developing a relationship? Yes, so I'd call it a win.

Thanks guys for your help. 

PS knowing I can ramble sometimes, I watched this Lynda.com video on elevator pitches and it helped boil mine down to 20 seconds or so. Hope it helps someone else.


Just remember we were given 2 ears and 1 mouth for a reason.

One of the best skills to master is listening. Some people want to go too fast with thoughts and will be blurting out the next question before the other person answering even finishes. There is a natural flow to conversation that makes it easy and comfortable to interact with another party.

You might think going fast shows you are a go getter. The guy with the money might see inexperience and hasty decision making that will lead to bad results.

It's all perception.  

Like it has been said, be interested in him first and what you can do to add value to what he needs.  Develop that relationship.  He will ask you about you and your interests and what you do in natural conversation and that is an opening for you to plant a seed and do what you can to peak his interest.  At the very least it will set the stage for you to be able to bring it up at the appropriate time in later conversations.