You have been thinking about it. How cool would it be if people actually invested in you? You are the beloved CEO of your own company (which technically, you already are), but now people are scrambling to make money and you are piling it in as the CEO.
Wouldn’t that be a dream come true?
Before we answer the question of investment in your online company, we have to differentiate on one characteristic of your company.
Is your company private or public? What I mean, is are you at a place where you have stocks available for people to purchase on the stock market? That would be a public company.
Usually, online companies are simply private companies, but that is ok. Some of the things that we are going to talk about in this article can loosely apply to you, as well. This is especially true if you are getting your online company ready to go public.
Analyzing your company
In the case of a public company, with stocks available for purchase, those investment firms who are considering purchasing your stock have to do what is called developing a fundamental analysis definition of your company.
We throw around the term stock and purchase stock, but really, if you have a public company, the investment is in shares. An easy way to think of it is that you are sharing a portion of your company and as a result of the input of money; there is the share of the profits (when the market goes up, with your stock value going up) with those who have invested in your company. They are called the shareholders.
You want your shareholders to be happy. And, you definitely want your potential shareholders happy enough to invest.
The first one means that you need to maintain the success that garnered their attention in the first place, and not only that but improve your success.
To encourage future shareholders, you need to have a solid company that demonstrates the potential for profit growth. This also means that your company should steer clear of scandal and other things that could affect your value. Of course, if you are a reality show, that may be something different and scandal may improve the value of your shares.
This is why it is so important for investment firms to utilize analysts to put together a profile of your company and whether you are worth the investment. Many times a lower level analyst begins that process (sometimes highly trained interns), but once all of the data is compiled (and that is a lot of data on your company, as they dig through the good and the bad), it is handed over to a financial analyst. That analyst is a higher-level employer in the investment firm and it is his or her job to make sure the investment firm is making good investments. In other words, it is his or her butt that is called into the CEO’s office if a mistake is made in the selection of shares to purchase and more importantly, the company they are considering.
So, you see, there is a lot that goes into evaluating a company to be included in a portfolio. And, these portfolios (if you are selected) are often shared with the investment firm’s clients, showing what their money will be invested in, so you definitely want to be a company that shines and does not scare off the clients of the investment firm.
This is where it is difficult as an online company because you really have to pop out of that “online” definition to be noticed. For example, if you are amazon.com or WalMart.com, you are likely to be one that could be considered. In the first case (amazon.com) they built an empire online system. In the second case (WalMart.com) it is an offline entity that has created an online presence. So, if you are the second (like WalMart.com), you probably have a fair chance. If you are the first (like amazon.com) you may have a few bridges to cross, but you can get there. Start getting your name out there and start being a company that cannot be ignored.
Personal Investment Strategy Using LinkedIn
Let’s go through a mock step-by-step in developing our own personal investment strategy using LinkedIn. So, put on your best investment analyst hat and kick back and let’s see what we can come up with on our end.
- Find an investor – if you already know an investor, great. You could approach that investor, even if it is a “dry run” to practice your presentation on him or her. The technique that I use is to search for investors to whom I am already connected on LinkedIn. You can search in their profiles, to see if they advertise that they are an investor, like my friend Michael. You can also look to see if they belong to groups who discuss investment strategies (find them by interest on LinkedIn). Here is an example of how that works. We will use project management instead of investment. So, if you are connected to my Deborah Anderson LinkedIn profile and looking for project management, you will likely find me because I list it (no I am not an investor). That is an example of finding people by interest on LinkedIn.
- Prepare NOT to connect with the investor on Linkedin – The first rule of communication on LinkedIn is not to just willy-nilly connect with people because they have the word, “investor,” in their LinkedIn profile. That is a great way to identify them, but only to find that they are an investor and not to SPAM them or any other unsavory method. So, now you have them as a potential lead. That is it, until the next step.
- The next step is to actually connect with them. You will want to keep notes, or simply use the LinkedIn Messaging system and that will log your communications. You want to prepare a personalized communication strategy with that particular investor and each investor. Again, this is not mass messaging time. Ask yourself what you know about your investor friend or associate and connect with them on that level. Eventually, work your conversation toward the possibility of investment in your website. You may want to keep a journal of the communication strategies and maybe a spreadsheet of when you connected with each investor. It is not unusual to have a different strategy with each investor.
In the meantime, all is not lost. There is no reason why you cannot find personal investors who will invest in your success. Possibly you have a rich uncle who wants to see you become a public company and he is willing to invest the money into your online business to help you get there. Also, there are sites like Kickstarter and gofundme to help others invest a small amount to help you reach the next plateau. So, there are options for you, even today!