How should I prepare before going to investors for seed funding?

First, know thy audience. Knowing your audience will ultimately determine how you prepare to present your opportunity to investors (regardless of whether they are family, friends, angel investors, or venture capitalists). You’d approach your family differently than you would an investor that you really don’t have a personal relationship with.

Yet, regardless, there’s one burning question that anyone you present your opportunity to will want an answer to:

What’s in it for me?

Think about that. The answer isn’t going to be the same for everyone. Sure, business savvy friends and family may have a more sophisticated viewpoint than someone who just wants to help you. Take crowdfunding as an example. What do the most popular crowdfunding campaigns have in common besides success? They give something back to those who donate. Learn from that. What would your friends and family get? Make sure you can explain it in a way that they will understand. Don’t use a lot of technical jargon, but don’t patronize people, either.

For angel investors, they may not want any equity or to make their money back (plus interest). However, they do want to know that what they are putting into your business will somehow make a difference. What will that money mean to your startup? Does it mean that you’re able to create more jobs? Do your research and know what really moves the angel investors that you have in mind.

For venture capitalists, what are they getting? When will they get it? How will they benefit? If you pitch to 10 VCs, you need ten separate presentations. This is because they won’t all have the same goals, wants, or needs.

Also, be prepared. Take your time on your presentation…and don’t rush through it. Try to put yourself into the shoes of the people that you’re talking to about your startup. What questions would you have? Make sure that you have your business plan ready. Be ready to answer questions about profit, operations, growth, and even marketing.

You’re also going to need contracts that are fair to you and to the other party. If you’d like some help with your contracts, LawTrades can help. As a legal marketplace, we’ve helped thousands of startups and we’d love to help you. Many of our attorneys are experienced in contracts (and in working with startups). You can have your contracts reviewed or even drafted by attorneys who understand the importance of transparency and communication.