I’ve been helping entrepreneurs raise capital for about ten years and have raised money for my own business three times. I also talk a lot to investors. I have learned that investors are looking for a lot more than a good financial return. Here is a list of some of the main things investors consider when trying to decide where to park their money:
- Trustworthy, high-integrity leadership – generally, investors feel a lot more comfortable investing when they sense that the entrepreneurs or fund managers they are entrusting their money with will be responsible stewards
- Reasonable level of risk – this is very much related to the first one – if investors trust an entrepreneur, they will perceive the risk of the investment to be lower; perceived risk may also be lower when the investor has a direct relationship with the business e.g. as a customer or supplier
- Transparency – many investors are frustrated with the complexity and opacity of Wall Street investing – they value being able to understand where there money is going and what it is being used for
- Being part of a community or tribe – when companies treat their investors as more than just a source of funding, but as a supportive, cohesive community, this can create a lot of investor value (I invested in a fund recently that actually provides zero financial return on investment, but gives me access to a community that I love)
- Being able to tell their friends and acquaintances about the cool thing they invested in – studies have shown that this is a big driver of investor decisions!
- Values alignment – a majority of investors state in surveys that it is important to them that their investments align with their values
- Cool perks – invitations to special VIP events, trips, discounts, sample boxes, etc. can add a lot of value for investors – I recently read an article about how much Estee Lauder’s shareholders love to be pampered and get goody bags at the annual shareholder meeting!
- Low to no fees – many investments involve middlemen and fees – opportunities to invest directly in a company allow investors to avoid those nasty fees
Interested in learning more? Get in touch!
If you are interested in working together, send us an inquiry and we will get back to you as soon as we can!