7 different types of investors and how to win them over

Disclaimer: This article is a summary and does not intend to be an exhaustive look on all investors in the ecosystem.

While some lucky business owners can start their own businesses with little or no external input, most businesses will need a little financial help from investors along the way.

You’ll meet many different types of investors for startups, so here are a few to look out for, a few to avoid, and how you can win them over.

1. The non-tech investor

These types of investors may not fully understand the technology behind your idea but will have plenty to say about your product, market, and business model. They will form their own opinions and assumptions based on their experience, which you may or may not agree with.

Try to move the conversation away from these assumptions. Instead, talk facts and make sure your value proposition is clearly communicated. There’s often a time for questions at the end of most pitches, but try to encourage questions throughout your presentation. This way, the investor doesn’t get lost early on, and you can clarify whatever it is they don’t understand so they can follow the rest of your presentation.

Also, try to consider different ways of communicating your idea. For some investors, what you say has the most impact, for others, it will be the visuals and graphics on the slides that help them to understand . A physical prototype would be a very effective way of showcasing your idea.

2. The skint investor

Maybe this investor’s pockets were turned out by a startup that didn’t quite work or they’ve ploughed further investment into a rising star. Either way, not all investors will have cash money on tap. They will, however, want to see what’s around the corner in a rapidly changing world even if it’s just to appear active in the market in front of their peers.

Keep them on the side and pitch to them as practice. Remember that most investors mingle with other investors, so word will spread. Just be aware that they have no intention of investing money in you right now, so avoid wasting too much time with these types of investors.

3. The detail investor

These types of investors want to know every detail about your business, even details explaining exactly what your business will look like five years down the line.

Of course, investors want to see a five-year forecast, and they expect this to look realistic. But you can’t see into the future and have all the details, so explain how you plan to get there but try to stay away from the tiny details. You can’t be certain about where your business will be in five years’ time because, as a startup, you’ll face many challenges and turning points.

Showing that you understand this should make it clear to investors that you know what you’re up against and that you’re happy to adapt in order to succeed.

4. The sheep investor

These investors are worth maintaining a good relationship with. They can give you some great feedback and advice that could potentially help you. The only problem with these types of investors is that before they consider investing in your startup, they want other types of investors to invest in you first.

It’s worth finding out about what they’re unsure of and whether or not you could smooth them over. You may want to start by finding other investors, while keeping a strong relationship with these investors, as they might become useful to you once you have your first angels on board.

5. The helpful investor

6. The greedy investor

7. The doubtful investor