Finding a blend of investor and mentor

[LocalSearchSolutions]

First post here, I've been a lurker for awhile. Really enjoy the discourse this board provides.

I'll get to the point. I'm interested in finding a blend of investor and mentor. <removed>... but more important than the seed funds are the engagement of a mentor - someone who has been on this journey before. I'm loathe to get a loan from a bank, although I do have assets as collateral. I also am not interested in giving up a significant ownership stake.

I'd gladly give the right person a 10% share of the business if they were active in mentoring me. The B plan for this biz is strong, it has a very real prospect of being a $1 million + business by 2018 (recurring monthly revenue model, low churn, reasonable cost per acquisition for new customers, etc).

How do you go about finding the "right" investor? People who are interested in the "give back" but also in seeing a real return on their investment. Many angels are looking to invest hundreds of thousands in turn for making millions on tech it seems. Are there angels that even operate with such low stakes?

Thanks in advance to all who decide to participate with replies!

[Harold Mansfield]

First post here, I've been a lurker for awhile. Really enjoy the discourse this board provides.

I'll get to the point. I'm interested in finding a blend of investor and mentor. <removed>...but more important than the seed funds are the engagement of a mentor - someone who has been on this journey before. I'm loathe to get a loan from a bank, although I do have assets as collateral. I also am not interested in giving up a significant ownership stake.

I'd gladly give the right person a 10% share of the business if they were active in mentoring me. The B plan for this biz is strong, it has a very real prospect of being a $1 million + business by 2018 (recurring monthly revenue model, low churn, reasonable cost per acquisition for new customers, etc).

How do you go about finding the "right" investor? People who are interested in the "give back" but also in seeing a real return on their investment. Many angels are looking to invest hundreds of thousands in turn for making millions on tech it seems. Are there angels that even operate with such low stakes?

Thanks in advance to all who decide to participate with replies!

First off, don't take offense but I need to remove your numbers since we don't allow those kinds of requests here.

There is no tried and true way of looking for an investor or mentor. To be honest you're pretty spot on that not too many people with the small about you seek laying around, would be interested in such a small return and also have to spend time mentoring. I'd much rather take that few grand and put it in a CD than risk it on a start up that will in all likelihood fail.

Look at it from the stand point of the investor. You're looking for money ( a small amount that you should be able to raise yourself), and guidance. That's not an attractive risk to most people. Most people won't look twice at anyone who can't even figure out how to make or raise a few grand.

You're only seeing it from the view of what you want.

I suggest you separate these 2 things. Look for or raise your own funding, and get used to having to learn almost everything on your own. You may find help along they way here and there, such as on forums like this, but the more time you waste looking for a mentor the more time you waste not learning on your own.

There are local organizations in almost every city that offer business help and some part time mentoring. SCORE is a good resource for budding and existing Entrepreneurs looking for some help and direction. https://www.score.org/

The SBA also has a lot of resources for start ups including hosting frequent webinars. I get a newsletter at least once a week promoting webinars on everything from Accounting to Marketing. https://www.sba.gov/

You may find that perfect mentor/investor, but I wouldn't put a lot of eggs in that basket. It if happens it happens, but until then get in the frame of mind that you are everything and will have to learn everything on your own.

[LocalSearchSolutions]

Thanks Harold. I've heard similar before - including that it might make sense to raise the ask amount for similar reasons.

I've checked out grants and SBA opps, but the SCORE link is interesting. I hadn't heard of that before.

Thank you again for your time!

[PedroMouta]

Hello!

So, it seems what you're trying to find is smart money.

In fact, more than money, what you really want is a mentor.

I'd like to share that most early stage investors often look to invest in a hands-off approach - if you know what I mean. They don't want to allocate their personal time to help you. This is pretty much the rule of thumb.

But naturally, you can also find people that are more than willing to take a small 5% stake in your company and help you (not mentioning the money, right now).

These guys will need to have some type of attachment to your business, so I would initially tell you what can create a strong bond with a mentor that you don't previously know.

1. He really likes your team personality, attitude and charisma. Somehow you guys make him remember when he was just starting too.
2. You're creating a business in a sector that he feels deeply attached to, either because he is very experienced on it or because he's looking to understand more about the subject.
3. You have great product traction and ask specifically for mentorship, not accepting only money. If you genuinely present this as a requisite, I think it will help you gaining charisma.

Now, if you have no idea how to meet investors, let me give you a detailed list of the ways I've found that work best.

Ways you can reach out to investors / mentors:

EVENTS
1. Large Summits, such as Web Summit. Some of the best examples are: Lift Conference, Web Summit, Startup Grind, Launch, Collision, 99U
2. Angel and Investors Conferences
3. Hackathons and competitions

Even if you are one of those guys that have a hard time talking to strangers – as I am – all you need in this type of events is a professional business card and a sales pitch.

Make sure you thoroughly memorize your pitch and be ready to present it to multiple people within the walls of the venue. I’ve been in many of these Summits, and I’m very confident you will manage to, not only meet a hand of great guys, but also create relevant connections to your future.

These Summits’ value is mainly focused on networking, and you don’t even need to make a great effort to go out and meet people, people will come to you. And then, if you start getting used to meet people randomly, you will surely make dozens of great contacts here. It is the best way to find mentors, to share your idea, to ask for advice and to learn. That's what I would definitely recommend you to do.

INCUBATORS
Incubators and Accelerators are firms that provide special programs to Startups to help them either proofing a concept or growing.

Typically, both genres provide office space and lots of networking opportunities, whether with other startups or advisors.

Because these firms are so close to the entrepreneurial world, as very often they are also the founders of massive summits, they have an exhaustive list of contacts of the primary investment entities, at least within your national reach.

They literally have people that have dozens of great contacts at your disposal. And, besides, their own advice is very welcome, they can point you out in the right direction.


NETWORKING
For sure, one of the ways to get in reach with the right mentors will be through your network of contacts, as I’m sure you know.

However, I’ve seen so many people talking about networking and how important it is, but actually few can build strong relationships and then, consequentially, benefit from them.

So here I want to give you a quick guide on what to do to getting along with fascinating people that will, eventually, want to help you or mentor you.

How to effectively network:

1. Try to see networking as building genuine relationships with other people.
2. Whenever you engage in a conversation, it is much better to listen carefully and get to know the person with whom you're talking to, instead of talking about ourselves and our desires.
3. At the end of the day, people mainly care about themselves and, besides, when in a verbal chat there’s a good chance the other part will end up saying you’re a great conversationalist if you listen more than you talk - true story.
4. I would advise you to be transparent and genuine, always. If you want to write to someone who you don’t talk to for a long time asking for a favor, tell them the truth; do not try to outsmart people.

I hope this ridiculously simple guide to networking can be helpful to you.

ONLINE

We won’t spend too much time here because it is pretty much straightforward. If you know with whom you want to speak, it is always a good idea to try to find the investors on Twitter, LinkedIn or their own website. Some mentors have a website, which is also great to know them and prepare beforehand a potential meeting.

When it comes to Social Media, I will stick to Twitter and LinkedIn. That’s pretty much all that matters nowadays.

Still, let me warn you that they receive a lot of daily requests. It is important to have in the mind that investors and entrepreneurs might never get back to you because they receive ten more requests like ours per day.

You can make a list of 10 to 20 investors with whom you’d like to talk and get in contact with all of them. You should be able to receive at least five positive replies.

In summary:

I would recommend you to stick with Large Investment Events or Incubators. Ask them to help you, be transparent, tell your story and your idea, say that you need help, and I'm absolutely sure that you will get great advice and eventually find your mentor.

Hope it helped.
Best,
Pedro

[SBANYC]

As an alternative or BTW, re finding a mentor, depending on what industry you are in, there is also the option find someone online who has the experience you deserve, especially if they are active in the digital/social media space, become friends with them, then slowly begin the pitch your idea to them, asking for an advice here, and an advice there. Until somewhere down the line you ask if they won't be willing to become more engaged. i.e. be your go-to person.

This is exactly what I did in my case

[DinahJ19]

I have found forums like this to be really helpful. There are lots of experienced people out there and lots to be learned.

[Paul]

You may find that perfect mentor/investor, but I wouldn't put a lot of eggs in that basket. It if happens it happens, but until then get in the frame of mind that you are everything and will have to learn everything on your own.

Couldn't agree more! Investors don't want to be your training wheels. They want to hop on a train that is moving, not have to push it. You need to get in the game, not just hope for a "lucky" contact with somebody to teach you. Do something, anything to get things going and you may find others become interested along the way. Investors love activity and motivation more than just "ideas". Harold has said many times "Ideas are a dime a dozen".

I've seen brilliant ideas go nowhere because nobody could get started and I've seen mundane run of the mill concepts become successful just from action.

Don't be too enamored with Angels and investors and all that. Generally, they are not "nice guys" trying to give back and help. They are trying to MAKE MONEY!

[SumpinSpecial]

Hi guys,
I'm glad this popped up again as I've been pondering this exact question lately. For my business, I've been thinking that I really need full time help with online marketing, as well a little bit of seed money (invested in the marketing activities). What I was thinking is that this new partner/investor would only work on marketing but I would continue with everything else: bookkeeping, sales and customer service, sourcing suppliers, managing inventory, etc. Do you think that even with this division of duties, the answer is the same as what you've advised LocalSearchSolutions?

[Paul]

Hi guys,
I'm glad this popped up again as I've been pondering this exact question lately. For my business, I've been thinking that I really need full time help with online marketing, as well a little bit of seed money (invested in the marketing activities). What I was thinking is that this new partner/investor would only work on marketing but I would continue with everything else: bookkeeping, sales and customer service, sourcing suppliers, managing inventory, etc. Do you think that even with this division of duties, the answer is the same as what you've advised LocalSearchSolutions?

I think your situation is quite different. You are not a risky startup, you are already in business looking for help to grow. You are looking for a working partner type person. That should be a bit easier.

[SumpinSpecial]

Okay, good point but interesting. After I thought about it, it kind of struck me as being like making someone pay ME for the privilege of working for me. LOL! I guess it would have to be approached carefully to avoid that.

[Paul]

Not exactly. You are offering an opportunity to be part of an ongoing concern. Although every business is at risk at any time you are well past the extra risky start up stage. You also presumably already know the business. You are smart enough to recognize where you need assistance. In your case it is more of an opportunity than a gamble for someone to participate. Big difference compared to a fresh start up. If you can demonstrate that the business is viable and that a little cash injection and some marketing help will result in greater success you can probably find who/what you need.

[SumpinSpecial]

Thanks Paul, that's encouraging. My numbers are good, just very, very small. ;)

[KOMPAR]

One word of advice from my experience is to not overvalue what investors/mentors say that they are going to bring. Sure, some of them are absolutely great at delivering value, but there are plenty of them over-promising and under-delivering in my opinion.

[Harold Mansfield]

Had to swing back around to this thread to share a recent experience.

I am in the middle of shutting down a side business that never got launched. I joined a friend to provide technical assistance and operational support for their start up.
They had the attitude that if they found the money everything else would fall into place. Well, they didn't really have a viable plan, didn't know how to adjust when it didn't work, and nothing fell into place. Why? Because no matter how much money you raise or spend you still need to know what you're doing.

Then 2 of the only 3 partners started fighting over one partner's lack of knowledge and failure to deliver their end of the work, and it was downhill from there. Now it's a total loss.

If the main person is not the most knowledgeable person in the start up or doesn't put in the work to learn what they need to, it will fail.
Money cannot overcome that.