Every business needs capital. But for most entrepreneurs, the process of raising capital is at best painful, and at worst … demoralizing. Most successful entrepreneurs talk to dozens, or even hundreds, of potential investors before one finally says “yes”. Of course, in many cases, the investors say “no” for a good reason: there may be something fundamentally wrong with the business, the management team, or the industry. Standard responses include all of the following: “Your business looks too risky”, “Too much competition”, “You don’t have any partners”, “You need to generate more revenue before I can invest”, “You need a fully developed product before I will invest”, “I need to see other investors on board before I can come in”, “I only invest in businesses where I can get a positive return within 18 months”, “I don’t know anything about this industry”, etc. etc. etc.

But suppose you are one of those rare individuals who has actually addressed all of these substantive issues and you STILL can’t raise any money. You’ve identified virtually every potential problem with the business, and you’ve done something to address each and every one. You’ve strengthened your management team. You’ve formed a strong board of advisors. You’ve redone your financial projections so your expenses and revenues are more realistic. You’ve found innovative and credible ways to beat your competition. You’ve identified potential partners and you have letters of intent from customers. You’ve even started generating revenue. You have all the makings of a real business.

But STILL no one wants to invest.

What is going on?

It could be that you look frustrated, or even worse, desperate. Your voice might be just a bit too loud. You might sigh just a little too often. You might just LOOK tired. You might wave off investors’ questions just a little too quickly. You might say something like “I’ve pitched this idea to a hundred people and no one seems to get it.”

The fact is investors can sense fear, anger, depression, or frustration. They are approached by dozens or even hundreds of entrepreneurs each year. If someone comes across as negative most investors will simply move on to the next entrepreneur.

Also remember that investors talk to each other. Investors travel in investor circles. If one hears about a good deal, he or she will usually pass it on to others. Investors do this because they want to reduce their own risk, and because they value each other’s feedback. Different people see the same plan but see different issues, so when three or four investors, each with their own viewpoints and areas of expertise, agree a company is a good investment, they feel more confident and are more likely to invest. On the other hand, all it takes is ONE negative comment to discourage everyone in the group from investing. Good news travels fast; but bad news gets around even faster.

Assuming you’ve addressed all the substantive business issues with your plan, here are a few pointers to help you improve your chances with investors:

1. Go in with a positive attitude. Consciously prepare for conversations and meetings with investors by eliminating negative feelings and thoughts beforehand.
   
   
2. Be patient. Investors will ask a LOT of questions. They will probe and probe and probe. If they aren’t asking questions, they aren’t interested — it’s that simple.
   
   
3. Practice your presentation in front of friends or colleagues. Ask them for feedback on your clothes, your posture, your tone of voice, your facial expressions, etc.
   
   
4. Don’t rely on presentation materials alone — in the end, investors invest in YOU, not the business. Be prepared with your presentation, but expect the conversation to veer off into unexpected territory. Bring lots of “supplementary materials” to back up any statements you make about the market, your customers, your competition, etc. Practice responding to “off-the-wall” questions. Many investors like to throw entrepreneurs an off-speed pitch just to see how they handle it.
   
   
5. Expect the worst and hope for the best. Raising capital is a numbers game. You should expect to get rejected, many times, before someone says “yes”. But once you have one “yes”, other investors will probably join much more quickly.
   
   
6. Display confidence, not arrogance. Investors are attracted to confidence, but shrink from arrogance. No matter how good your business concept is, if you’re so overbearing that others can’t stand being around you, your business will probably fail. This holds for any company, but it is even more important when you are just starting out.
   
   
7. Show investors how your business will benefit them, not you. “What’s in it for me?” always applies. Most entrepreneurs think investors are mostly concerned about how much money they can make. Of course that is a factor, but most investors first want to make sure they won’t lose their money before they even think about how much money they could make if things go well. The more things you have in place to protect their investment, the better.
   
   
8. Be polite and respectful. Remember, investors are people too. They have personal lives and their time is valuable. If you strike out with one investor, just chalk it up to experience and quietly move on to the next.

Ultimately, no one can guarantee you’ll get the funding you need, but if you follow these simple rules you will greatly increase your chances of success, and hopefully your first impression WON’T be your last.

Andrew Clarke is the CEO of Ground Floor Partners, a business consulting firm that helps early-stage, small and middle-market businesses grow through design and execution of sound business strategies.

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