You want to scale, you want to grow and often the only way to do that is with capital. There are numerous ways to get extra money to pour into a business – increase sales, get a parttime job, downsize your home and sell any unused items online… Sometimes, the best way is to approach investors and venture firms. The question now is: what does it take to get that deal?

At Arctic15 last year, our special guest Ann Winblad (entrepreneur and investor) shared some special insights on how to approach investors and increase your chances of getting funded. Here are five of her insights:

Timing

Approach an investor when you’re ready. Don’t approach them too early because it will be hard to find investors if you have not hit a significant milestone, financial or otherwise. “We’ve got an idea we think is great but we’re running out of money” is not a significant milestone.

Amount of Capital Needed

You need to know how much money you believe you will need and for what. This needs to be an actual estimate you have put real thought into. The specifics will be useful to your investor and will also help you focus your search when looking for the right firm or person. Also, remember that nobody likes when you take their money and spend it loosely, investors included. Be practical, be transparent and look for an investor who understands your financial reasoning.

Vision

Do you have an idea about how you are going to grow your business, can you explain it, and can you describe the path by which you believe you will grow it? You should have clear answers to these questions already in your mind when approaching an investor or venture firm.

Don’t use your vision slide to come up with a fake hero story, though. You may have been told that investors want to hear how your business is changing the world, so you must come up with an audacious vision, even if it is not entirely true. Do not go down this slippery slope. Be honest about your market, be reasonable and look for an investor who shares the vision you are actually trying to achieve.

Options

You know what? It’s hard to get funding, and it only gets harder with each new round. You need persistence, a viable business model, and you need a large enough number of investors and firms interested in funding your industry for you to get 50+ “No”s and still have more options. If you’re in a newer industry or niche, try approaching investors anyways and explain why your product or industry is valuable and potentially profitable.

The ‘Right Fit’

Don’t approach every firm or every investor – be thoughtful and be selective: try to pick the right investor(-s) for you and your product. Many firms and investors have their past investments recorded on their LinkedIn pages, on their websites, or elsewhere: go to these places and do your research before you spend your and your potential investor’s time.

Specifically, check what products or interests they seem to be investing in (your food delivery robot may not be of interest to a company who explicitly states they ONLY invest in software) and check if they have any specific benchmarks they require (do not send your first prototype draft to a firm that is looking for mature businesses making millions in revenue who want to double their market).

Here are some tips for your first funding round. Have something to add? Share what tips have and have not worked for you in comments: