The “Investable” Entrepreneur: How to make you and your business attractive to investors

If you are an entrepreneur looking for sources of funding for your business, you have surely heard about obtaining small business loans through your bank, applying for lines of credit, and possibly, asking for funding from family and friends. There is, however, another popular source of financial support: funding through investors.

According to the Angel Investment Network, a Canadian web-based service that matches investors seeking investments with entrepreneurs seeking capital, Angel investors are currently investing over $3 billion in Canadian businesses each year. “This number would be substantially higher if these Angels were better able to find and review new types of investment opportunities.”

So how can one become better prepared to approach investors? What does it take to be perceived as an “investable” entrepreneur? Black Ink spoke with Joanna Track—the president of Sweetspot.ca, Canada’s first online, trend-spotting lifestyle guide of its kind. Starting with a newsletter in 2004, Sweetspot.ca has tripled its revenue since an investment from Rogers Communications Inc. made Joanna’s “sweet” dreams come true!

Joanna Track, President, Sweetspot.ca

BIM: What motivated you to create Sweetspot.ca?

Joanna Track: The concept was inspired by a similar business in New York called DailyCandy. I worked in advertising and transferred to New York where I was introduced to DailyCandy . . . I found that there was nothing like it in Toronto when moved back about six or seven years ago. I always knew I wanted to be my own boss. I had a good base to take the leap and I ended up digging into my RSP to get it started.

BIM: How simple or difficult was it for you to get enough people on Sweetspot.ca?

JT: There were 600 people the day I launched, and it was through friends and friends of friends and we reached 10,000 a year later. Our first newsletter went out in June of 2004 and the first advertising sale of that year was in November. A lot of it was viral, through bartering and partnering especially with marketing help.

BIM: When you start a small business, there are a number of challenges and small wins along the way; what was the experience like for you when you first got started?

JT: The challenges were big, the biggest being the month-to-month expenses and being able to pay them. But it takes money to make money. Everything costs money so [it summoned] bartering and good PR. I had to get creative on spending effectively. The wins are what kept me going. I started by sending emails to my contacts and then it grew virally as I began getting calls from companies to get featured.

BIM: Tell us about the day when you got the call from Rogers.

JT: Two years into it, I had been approached by other companies but it didn’t work out or feel right and I was turned off by these big companies. When Rogers came along I wasn’t [initially] too excited; I had the confidence that I can do it on my own, but partnering with Rogers could make it faster and easier.

BIM: In your online discussion with the Globe & Mail you said: “I think the thing that Sweetspot has that attracted them, was a unique business model, with good profit potential. But as they told me, they were buying into me, even more than the company. I think I showed them that I had a good balance of creative ideas, and strong, effective business skills. I think at times there are entrepreneurs out there with fantastically creative business ideas, but have a challenge managing the day-to-day business operations. I was able to show Rogers I was good at both.”

Tell us more about your personal brand and some of the inherent attitudes and behaviours any business owner needs to make the business work?

JT: They were impressed with me. I remain very professional and at the end of the day it’s always business. Business cards and invoices are essential, even if it’s two people; and have all your financials organized and ready. Treat it the same way as if you were a large corporation. Rogers saw my confidence and organizational skills. Confidence comes from knowing your strengths or weaknesses. Know your stuff, or if you don’t know, ask somebody.

BIM: How can an entrepreneur go about making themselves more attractive to potential investors?

JT: Have the confidence, looked polished and professional and not just aesthetically, but also in substance; keep your financials in order, have your business plan ready. The business plan gives you a starting place and you need to have a vision and a revenue plan. In a few bullet points you can outline [your] vision, mission, how you operate, and how you make money.

Visit www.firstangelnetwork.ca or www.angelinvestmentnetwork.ca for more info on finding investors.  For more information on Sweetspot, check out www.sweetspot.ca.

Sandra Gabriel
Editor-in-Chief
Black Ink Magazine