How to build rapport with an investor

7 Steps to Build Rapport With an Investor

Building rapport with an investor is no easy feat; you can compare it to taming a tiger. Managing a deadly beast will take trust, empathy, leadership, storytelling, building relationships, and time. The goal is to have a name in your black book that you can call anytime to buy into your next million-dollar idea.

How to build rapport with an investor uses a range of soft skills that showcase charisma. If you want to influence investors, chairmen, and board members, then you will need to level up your charisma through charisma coaching. If you are ready to get started, book your discovery call below:

How to Build Rapport with an Investor

To effectively build a relationship with an investor, you want to follow the rapport-building process:

  • Meet & Greet
  • Fact-finding & Common Ground
  • Active Listening & Understanding the Investor Needs
  • Connecting Deeply
  • Give, Give, Give
  • Leveraging Relationship
  • Follow Up & Long-Term Strategy

Why Rapport is Important for an Investor

How to build rapport with an investor

It would help if you remembered that investors are in the ‘people business,’ NOT the money business. While looking for a return on their investment, they have to buy into the person and how they communicate their idea to them. If someone can make an investor a 20% return on their money but the investor does not like them, they do not communicate, and cannot work for others, and there is another person who can give them a 15% return BUT the difference is they can work with difficult people, communicate ideas clearly, and can influence and persuade people to buy, then that is the winner.

Rapport is not a nice thing to have; it’s an essential component of charisma and securing money from an investor. Many people have successfully received investment for an idea not because it was a great idea, but the fact that the person built a relationship with the investor and communicated their business in a way that spoke directly to the investor.

7 Steps to Build Rapport With an Investor

How to build rapport with an investor

How to build rapport with an investor can be tricky, but with the 7 steps, you will be well on your way to smooth-talking your way into a cash injection into your business.

Meet and Greet

The first thing you will be asking yourself is “Where do I find investors to meet?” Well, the answer may not be as tricky as you might think; you can find them:

  • Golf clubs
  • F1 events
  • Hospitality suites
  • Charity balls
  • Luxury gyms
  • Shooting days
  • Whisky tasting
  • Networking events
  • Tennis clubs
  • Business conferences
  • Entrepreneurial hubs
  • University Entrepreneurship Centres
  • Online Platforms such as LinkedIn

You want to find out the hot trending spots where investors spend their time. Some will be in the boardroom of a WeWork office; others will be at the center court at Wimbledon. You have to do the hard work in trying to find out where the investors you want to reach will spend their time.

Once you have found your ideal investor, then you have to make a great first impression. You can do this by:

  • Making eye contact
  • Dressing Appropriately
  • Smiling

Making eye contact is so important when it comes to building rapport. When you look someone in the eye, it releases a chemical in the brain called ‘Oxytocin,’ otherwise known as the ‘Bonding’ hormone. People feel a deep connection when you look at their eyes, and it builds trust with the other person. Don’t believe me? Next time you are speaking to someone, avoid eye contact and see how long it takes for them to get suspicious of you.

Genuinely smiling is an effective tool when building rapport with an investor. Humans gravitate towards those who are positive and make us feel great; smiling achieves this because a smile is infectious. A smile also conveys confidence and competence, which are qualities that an investor is looking for.

Dressing appropriately can be difficult, but to help you adopt the ‘chameleon effect,’ as a chameleon can change its skin to blend into backgrounds, you too must be able to blend into different situations. If you are trackside at the F1, then a polo shirt, loafers, and Ray-Bans will help you blend in. However, if you are at the business conference, you will just look arrogant. Blend into your surroundings and wear the appropriate attire because the wrong outfit can give a bad impression.

Fact Finding and Common Ground

When building rapport with an investor, the key thing you want to do is make them the star of the show. Think of yourself as a talk show host; the audience has no interest in Graham Norton or Jimmy Kimmel; they are there for Will Smith, Daniel Craig, or Taylor Swift. The job of the talk show host is to make the guests the stars of the show by getting them to open up and share stories, facts, and details about themselves. You can do this by asking open questions; these are questions that start with:

  • How
  • Why
  • What

The worst thing you can do to build a relationship with an investor is to talk about you, your business, or how special you are. Ask open questions to learn more about the investor, not just professionally but personally as well. Take a look at these examples:

  • Why did you invest in X company?
  • What do you do outside of work?
  • How did you become an investor?
  • What do you look for in a great investment?
  • Why do some businesses fail?
  • How do you unwind from a day of business pitches?
  • What is your investment philosophy and the types of opportunities you find most compelling?
  • What key qualities do you believe make a successful and resilient business in today’s market?
  • How important is the team behind the business to you?

You want them to start to share stories, anecdotes, and opinions to find common ground.

Common ground is often misunderstood; just because you both enjoy golf doesn’t mean you automatically have rapport. Common ground is when you share:

  • Ideas
  • Opinions
  • Emotions
  • Interests

People have common ground when they connect over the above. For example, if the investor loves golf, but you hate golf, it doesn’t mean you have nothing in common. They are passionate about a topic, and I am sure you are also passionate about a topic; they can be different, but you can share in that love for something.

Active Listening & Understanding the Investor Needs

Listening is perhaps one of the most active things you can do when building rapport with an investor. It is very natural to keep interrupting them, wanting to cut to your pitch; slow it down—the rewards come to those who wait. It’s easy to fall into the trap of wanting to get across what you want, what you need, you, you, you, and this kills your charisma.

You need to use empathy to see the situation from the perspective of the investor. They do not just want money; they also want:

  • An aligned vision
  • Transparent communication
  • Trust
  • Responsiveness
  • Leadership
  • Someone they can collaborate with

You can understand better your investor’s perspectives and needs by actively listening to what they are saying and understanding the emotions and drivers behind them. For example:

  • “My last investment tanked; I promised myself I would never consider a tech business again” – Here the investor is concerned, wants to be reassured, and needs confidence.
  • “How do you know you can be successful, I have seen a million like you?” – The investor is uncertain about your capabilities and needs confidence that you are the right person for his money.
  • “The space industry? Don’t make me laugh; we are going to Mars next aliens are landing!” – Here the investor doesn’t take your industry seriously and needs more info to understand.

How can you build rapport when actively listening? It’s not by nodding and occasionally saying “Oh yeah!”. By using a technique called labeling, you can build rapport but address the emotions, opinions, and thoughts behind the words. Labeling is when you say:

  • It seems like…
  • It looks like…
  • It feels like…

Let’s look at an example:

  • “It seems like you are concerned about your investment, which I understand; however, why a business fails is down to a million factors, and I will make this a success.”
  • “It feels like you are unsure about my abilities; I know I am the right man for this because I have proven the business model.”
  • “It looks like you have been watching too much X-Files; the space industry is fantastic as it aligns with our goals and vision.”

Connecting Deeply

Connecting deeply is the biggest obstacle when building rapport with an investor. You have got them to open up, learn about them, and find common ground; now you need to go for the bullseye. You need to emotionally connect with them; you can do this by sharing stories.

Stories are one of the most powerful ways you can connect with someone; a good story can create an unbreakable bond with an investor. Learn how to tell great stories and anecdotes that show personality, vulnerability, or humor. Here are a few examples you can build stories around:

  • A client success story
  • Why did you start your company?
  • Your first experiences in business
  • A funny failure or learning experience
  • A university/college anecdote

Stories are immensely powerful; they can communicate ideas and make you far more memorable. Let’s face it; who wants to read P&L reports? We want a good story!

Give, Give, Give

There is a phrase I learned while working in luxury sales called ‘earning the right to ask.’ It can be summed up quite simply.

If you went up to someone at a bar and said, “Hey, do you want to go out with me?” 99% of those people would say no; you weirdo, get away from me! This is because they have not earned the right; they have not given the other person anything; they have just thought about themselves and their own needs.

When building rapport with an investor, you have the danger of falling into this trap, and, usually, you NEED them. Perhaps your business relies on their money, which can make things stressful, and you come across as desperate, which can kill your charisma. You can ‘earn the right’ to ask them for a favor once you give, give, and give some more. You can give an investor a range of things such as:

  • A guest spot on your podcast
  • Mention them in a blog post
  • Acknowledge them on LinkedIn
  • Invite them to an event you are attending
  • Give them a trial of your product
  • Treat them to dinner
  • Invite them to watch their favorite sport
  • Play their ideal sport with them
  • Invite them and their partner over for wine and cheese

Think of relationships as a bank account; before you can withdraw any money, you have to make sure you have deposited money first. In this case, by taking the initiative and giving before withdrawing, you can ensure you build an unbreakable relationship with an investor. Remember you do not just want one investment; you want them to invest in ideas years from now, and you want them to tell their investor friends about you to grow your network.

Leveraging the Relationship

This comes to the bit that people do not like, asking them for money. Let’s go back to the concept of ‘earning the right’; if you have successfully made a good first impression, learned all you can about the investor, bonded over some common ground, actively understood the point of view of the investor, given more than you took, then you have earned the right to ask them for anything. If you have done each of the steps correctly, then you should be in a favorable position.

I understand it is uncomfortable, but let me give you a quote that spoke to me:

“Victory in the business arena is not a solo act; it’s a collaboration. Winning an investor is like gaining a valuable teammate on the path to success.”

You will have to change your mindset; this is not about getting one over on another person; getting an investor is about collaboration. They are giving you funds, and you have to make sure they get something in return. It doesn’t always need to be about money in the beginning; it could be:

  • Exposure to a new industry
  • Further networking opportunities
  • Early access to the product
  • Brand association
  • Access to innovation
  • Access to talent
  • Legacy building
  • Market insight

With a majority of businesses failing, it is unlikely that they will make money, however, look at all the value you can provide them. You see it is not a one-way transaction but a collaborative deal where everyone gets something for their money. The money is the bonus.

Follow Up & Long-Term Strategy

Now that you have built rapport with the investor, what do you do now? Well, a relationship is not a one-off hit; it is something that has to be cultivated and nurtured over a while. After your interaction, you cannot just leave it there. If you do, the small spark that you have worked hard to create will not turn into a roaring fire. To maintain the relationship, you need to continue the give, give, give step and also reach out periodically, such as below:

  • Forward them an interesting article you thought they would enjoy.
  • Send them a message saying, “I was just thinking about you, how are you?”
  • Whatsapp memes.
  • Comments on topical events that they are interested in, such as F1 winners, football matches, or business news.
  • Give them a small gesture gift like a book or goodies. If you can tie it to their interests or passions, bonus points.
  • Pass on interesting podcasts.
  • Remind them of good times you shared, such as, “Hey, I was thinking about that round of golf we did, we should do it again.”

You want to be in their mind’s eye enough that they remember you, but not too much that it’s annoying. It is a real art form, and unfortunately, everyone is different and will require different levels of attention. You will have to do some trial and error to find out what works for you.