Approaching a private Investor

3 Replies

I have someone in mind that could make a great potential private investor. I’m wondering what type of information I should prepare to present to this person as well as general tips for approaching a private investor. Thanks!

hey @Shaun Morgan , I don't have too much experience in this field so DEFINITELY take my opinion with a pound of salt, but from my education in entrepreneurship and from what research on the topic I have done, when it comes to private investors it is less about what info you bring to the table on the first visit and more so how you approach the situation. I was even just listening to some of the first podcasts today -i think it was show 11 or 12 or so  - on private funding through seller financing and how they highly recommended not even approaching the subject of financials until they had met and talked at least 3-4 times prior.  Again, newbie here, but I would try and build a relationship with the person prior to asking for investing. I'd say, hey I know you are a local investor, and i am too - want to get some coffee some time? Then see if his goals align with your plan, and after a few visits say, hey John Doe, i have this deal, can i have your advice on if you think it is a good deal, and something that you would conciser putting your money down on?

Again, take my word as that of an amateur as well, but that's how i would approach it. 

@Shaun Morgan

First thing is you really want to build a relationship with them. 

I'm actually taking a potential investor to lunch tomorrow. He's someone I've known for 14 years but not been close to. 
He's a smart business owner who "retired" a couple years ago and is now starting new ventures. I reached out to him stating I'd like to get together with him to get his inputs on ideas I had for building wealth and what kind of advice he'd have to offer me. The intent of this lunch is simply to let him know I admire what he built and let him know where I'm at and what my plans are. Hoping he'll see something in me that makes him want to share his expereinces and continue to stay in touch. 
I won't even mention the idea of getting $ from him at this point. 
After a couple of these types of meetings and once I've found a property and have it under contract I'd then reach out to him and show him the deal. Asking him what he thought and if he knew anyone that might want to invest in it. 

Hopefully by that point I've built a strong enough relationship with him that he says "yea Derek I'd like to invest in it with you, your numbers look good and I trust you" 

In other words unless you have a smoking deal sitting in the coffer you don't want to ask for money, you want to build a relationship. 

Good Luck 

Shaun Morgan I have done my fair share of investor presentations having raised millions of dollars. The key to the presentation is to build rapport in the first few minutes if you can. Find something in common to talk about straight off. I find the best presentation is the simplest. Too much detail and you get lost in the weeds. You can always send more detail later. What you want to focus on is the ROI for the investor and how you minimize risks. All they care about is how much money they can make and what's the downside if the project goes south. Most of my deals close on the first or second meeting but don't be discouraged if you need more. And never let them see you sweat. Present with confidence. You might want to come up with a list of objections for yourself that you can practice the answer to. If you don't know the answer just say so.

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