Neil Patel is a marketing and all-around business rockstar today.
He continues to tackle the video marketing space by putting out high-value content where he drops his expertise.
There are many ways to get funding and depending on the type of business your approach may vary.
In this video Neil nails some key lessons all new founders must understand to win with investors. Neil has raised over $20 million in venture capital over the years.
There’s a lot of great insight in the video but we want to call out three really great lessons:
Lesson 1: Only raise a little more than you need
As you can probably imagine, things always go wrong so he suggests adding a little padding. This is a great point because if you’re thinking about what you need to do in the next 6 months and 12 months, which an investor will want to know, you should be clear about exactly how much need to make those steps.
More money does not make things easier, it makes them more complicated and usually means giving away more of your company.
You shouldn’t raise more than you need at a given time.
Lesson 2: You Must Build Relationships
This is a HUGE tip.
Actually, once you start hunting for funding you will quickly find this lesson is shared by all big players. You must get out from behind your computer and meet people in person. We have learned this at Change Creator as well and we recommend you take it very seriously.
As Neil mentions:
“It’s not about raising money from random people, it’s about raising money from the right people.”
You have to have a strategy and know what kind of investor you need so you can go to the right places to connect.
Ken and Ben Lerer of the firm Lerer Hippeau will back this up saying that one of their most important factors when investing is if they trust the person. A good idea does not matter if they don’t trust the people involved. Neil mentions that many times the idea you start with tends to change over time anyway. He gives a great example about Twitter. It started out as ODEO, a podcast company that didn’t work. So Twitter was born.
You can’t trust someone you don’t know. You have to let people get to know you if you want them to invest in your startup.
Network with people and get their feedback before you pitch them.
Lesson 3: Get a Co-founder & Think Big
This is important for multiple reasons. Statistically, businesses that have co-founders are far more likely to succeed. So, if you don’t have one now you should start thinking about who could help and where to find them. At the same time, having a co-founder also increases your chances of landing investment. It’s important that they complement your skills and are not the same.
One thing we have experience directly at Change Creator in discussion with investors is that they want to see a big vision. If the money isn’t big they will probably pass.
“They would rather you go for a big idea or lose money. They don’t want you to create a business that makes only $20 million per year. It doesn’t do much for them.” ~Neil Patel
Investors get a lot of emails and people trying to get their attention so how can you connect the right way? Luni Libes has over 25 years of experience and shares is expertise here – How to Really Reach Out to an Investor (And Not Waste Their Time)
Check out Neil’s latest book. This is the book that inspired us to interview Neil. You’ll find a ton of incredible strategies for stepping up your game.