The Art of Investor Empathy: How 2 Raise Money
Across all industries and sectors, funding is the lifeblood of growing ventures. But for most first-time founders, raising money beyond the initial friends and family round is an intimidating process. How do founders know they’re taking the “right money” at the right time?
Members of the Babson community found answers to their questions about funding this past Tuesday as the Blank Center welcomed angel investor Ziad Moukheiber, CEO of Boston Harbor Angels, for our first How 2 Tuesday event of the semester, How 2 Raise Money: Art or Science? Based on his extensive experience as both an angel investor and a founder himself, Ziad believes that the process of raising money is more of an art than a science. For our group of entrepreneurs, Ziad’s main advice was to master what he calls investor empathy: the art of understanding the needs of potential investors.
So what do investors want to see in startups? Ziad shared that from his experience in the world of angel investing, investors would prefer not to spend their money merely testing founders’ ideas. Instead, when investing they look for founders who have already validated their ideas and gained traction with limited resources. In his words, “How much money can you create with as little money as possible?”
In addition to validating your idea resourcefully, Ziad emphasized the importance of assembling a team for your venture. BYNBYNI is Ziad’s key team-building tip for entrepreneurs, an acronym for Build Your Network Before You Need It. Ziad cleverly compares this concept to knowing a doctor before you’re sick; even if your venture’s rapid growth seems beyond the horizon, you want to be prepared. From his experience, these are the top 10 team members that angels will be looking to see you’ve added to your venture before they invest:
- Shadow advisor
- Corporate lawyer
- IP lawyer
In a startup culture which glorifies the solo-preneur, assembling this roster can seem like a daunting task for new founders. Here are Ziad’s 3 Actionable Tips for Building Your Network.
- Introspect: “Recognize your own strengths and weaknesses, and start building from there.”
- Fill out your calendar with events for your business: “Don’t expect anything, just go!”
- Get out of your comfort zone: “You can’t be successful if you aren’t curious.”
After walking us through a timeline of the different types of funding available to founders as they build their ventures, Ziad finally answered the burning question on everyone’s mind: what is the best form of non-dilutive investment? His answer: paying customers and revenue!
We hope you enjoyed these insights from Ziad’s talk, and that you check out the Blank Center’s How 2 Tuesday events throughout the semester! On Tuesday, October 1, we’ll be hosting How to Build and Manage your Sales Pipeline with Babson Entrepreneur in Residence Priya Iyer. Register for the event at https://h2salespipeline.evetbrite.com, and check out this semester’s entire How 2 Tuesdays schedule at http://bit.ly/2019h2tuesdays.