After the dot com bust, I served on a panel with Tom Clancy, a former partner at Enterprise Partners Venture Capital, a billion dollar venture fund in San Diego.
Having been burned by poor investments like most other venture funds, Clancy said that, going forward, Enterprise Partners would wait at least six months before funding any new company they met.
Their rationale was that during the six month period, they would see what the entrepreneur was able to accomplish. If the entrepreneur accomplished the
milestones set forth in their business plan, than they were deemed worthy and would receive funding. If not, they would not.
The rationale behind the strategy makes sense. Venture funds primarily invest in people, and those people with a proven track record are typically the best bets.
So what is the entrepreneur to do during the six months in order to get the investor to write them a check?
Obviously they need to achieve milestones... But what else?
Before I give you an answer, I want you to know how crucially important this is, not only in raising capital, but in securing key partnership and gaining key customers.
Let me give you an example of an entrepreneur who successfully used this technique in order to get a key partner. This entrepreneur is now a famous author and marketer. His name is Chet Holmes. And one of the key reasons that Mr. Holmes achieved success was through his partnership with marketing guru Jay Abraham.
How did Holmes get the partnership with Abraham? Like many people, he tried to reach him by phone, fax and mail. But Holmes did it every other week...
...FOR TWO YEARS!!!
Then, he finally got a call from Abraham's business manager for a lunch appointment, flew to Los Angeles for lunch, and established a very profitable partnership.
So, what's the answer to the question of how to woo investors, customers, partners, advisors, key hires, and more over six months?
Effective and persistent communications. In other words...
You must consistently, over a period of time, hammer home your message to investors, key customers and others.
What exactly does this mean? For investors, once you meet them, you should follow-up with them at least twice per month to update them on your progress. For prospective customers, you should contact them on an ongoing basis to continually give them value and convince them of the benefits
of working with you. And of course, don't forget to follow-up with your existing customers.
And a key here is that this follow-up should NEVER END unless or until the costs of the follow-up clearly outweigh the benefits.
Remember that people invest in, buy from, and partner with other people. So, who would you rather work with? Someone who has been contacting you for two years with quality messages regarding why you should partner with them, buy their product or invest in them? Or someone who you just met yesterday and tells you how great they are?
The answer is clear.
Don't stop at the first contact. Choose the appropriate frequency (i.e., you don't want to be perceived as too obnoxious or pushy to potential investors), craft quality messages, achieve your milestones, and convince investors and others to work with you over time.