The Best Way to Approach Investors?
I often get asked about the best way to approach investors within the Entrepreneurship Through Acquisition (EtA) community. My emphasis is on the search fund niche within EtA, where business buyers are looking for stable, profitable, and enduring businesses to operate and grow them over the long term.
Getting started on this path is neither a simple nor a quick process, as I discovered while developing the EtA Launch Hub, a pre-accelerator for prospective business buyers (or “searchers”). Along the way, I ended up writing a comprehensive 200-page guidebook for searchers and launching a mini-TV channel, VAULT, to support them. The reason for this complexity is that we are continually building upon the existing knowledge base, and the field is always evolving with new models, investors, lenders, and service providers.
My number one tip is to keep the end in mind by creating a vivid portrait.
Three Steps to Creating the Portrait
Here are your three steps:
- Envision Your Satisfaction: When you reach the end of your entrepreneurial journey and look back, what will bring you the most joy and satisfaction? This answer varies for each entrepreneur. Whether you’ve grown a $2 million company into a $5 million one, or a $10 million company into a $25 million one, the benchmarks for success can differ widely. Is it about the money once your needs are met? Is it the number of employees? Their ownership stake? Their feeling of belonging? Is it the happiness of your customers, the recognition you receive within your community, or the financial stability and well-being of your family? Or perhaps, it’s the simple satisfaction of knowing, “I did it my way!” Something else altogether? What combination of these and to what degree? Your answer will be unique to you.
- Plan for Operating Your Business: Given a reasonable amount of money to invest in your business, how would you approach running your business to grow it? Be as specific as possible.
- Know Your Strengths: Why are you the right person for this task? The answer goes beyond technical skills. It encompasses who you are as a person, what you value, your life’s purpose, and how you relate to others as human beings.
I now have two notes or cautions to add to these three steps.
Take Your Time
Take your time to obtain a vivid portrait or mental model. Many people spend too little time thinking about the end of their journey and giving it a proper portrait. Visualizing it can be difficult, especially at the start. It may take repeated sessions of thoughtfulness or daydreaming. In this world of 24/7 entertainment and messaging, it feels like the art of daydreaming has been lost.
I find my best ideas come when I’m in nature – walking on the bike path or swimming in the ocean. My thoughts often begin as a sketch or outline, becoming clearer the more I reflect on them. Conversations with knowledgeable individuals then help fill in the nuances and shadows of the portrait or mental model I am creating.
Adjusting for Serendipity
Many of the best things that have happened to me have happened randomly. So, I aim for my portrait to have a large enough canvas to accommodate new shapes and possibilities. However, the clearer I make this portrait, the more likely I am to find the resources I need and the less likely I am to stray down the wrong path.
Once you have this vivid portrait, you can align your current position with your aspirations and outline how your investors, lenders, and even business owners will help you get there. I can feel the difference in how searchers act and express themselves when they have done the hard work of creating their portrait. It gives them clarity, direction, and an unwavering sense of purpose that is palpable.
If you feel like you want some feedback or are feeling a bit stalled, feel free to book an appointment with me.