I'm often asked by people how they should make the perfect investment pitch. They want to know all manner of things from what material to bring along, what financial figures are most important, right down to how many Powerpoint slides they should use!
These are all extremely important of course; but an investment is always a two-way relationship. As important as it is for you to get one - it's even more important to get the right one.
Different business models require different types of investors, in terms of their sector experience, and whether they are a hand-on or hands-off investor. Carefully analyse what you are looking for and then choose an investor accordingly.
It's nice if you get on with your investor on a personal level, but the needs of the business come first. Are you looking for someone to help you launch, or have you already started up but now want to grow? If you have a good level of experience in your sector, people who specialise in seed capital are ideal as they will give you the freedom to bring your passion and business idea to life.
Another key thing to look for is their level of expertise in your particular sector. The better their track record, the more chance there is of making your business a success. It also means they will share a similar passion to you - for example if you are developing a fashion business, would you not want somebody who feels the same way about it as you?
Earlier this year I launched a Venture Capital company specifically designed to back entrepreneurs in the recruitment sector. The reason was that this is the area I know best and have had the most success in. Recruitment Entrepreneur is now the fastest growing seed capital fund in the industry, and one of the reasons we are approached so often is because of our expertise in this sector.
Something a lot of entrepreneurs tend to get hung up on is equity. I can understand their fears, as nobody wants to feel as if they are giving away control. But the benefits far outweigh any loss of equity. I have always said that it is far better to own 60 or 70%% of something that has real value, than 100% of what is merely an idea.
Generally speaking, investors will be able to provide you a network of contacts as well as just pure capital. Speaking from my time on Dragons' Den, people that we invested in found that they were able to scale up far quicker purely because the Dragons could put them in touch with key clients. However you should also look for investors that will allow you to grow as an individual. Having someone that can guide and mentor you will ensure your personal skill set also expands.
It's not uncommon for entrepreneurs, particularly those new to business, to get caught up in the nitty gritty of their company and lose sight of the bigger picture. But if you have an investor who is mentoring you, they will turn out to be an invaluable asset.
James Caan is offering up to half a million pounds and his mentoring to the next recruitment entrepreneur. To find out more visit recruitmententrepreneur.com
Follow James Caan CBE on Twitter: www.twitter.com/jamescaan