Sourcing Activities

Investments are the life blood of the business world. Some would argue that those that invest are taking advantage of entrepreneurs and the system rather than contributing themselves. This is of course a false notion, as anyone that has considered the multifaceted realm of finance can attest. With liquidity among assets being one of the prime reasons that new businesses fail, the attraction of these individuals is paramount to success. What isn’t as obvious is that these investors may be as attracted to your business as you are to their backing. An entrepreneur must place a hefty weight on understanding the procedure and thought process that accompanies investments.

            Sourcing is the first step of the investment process, focusing on the identification and organization of potential opportunities. There is a large amount of variation among strategies and tactics available to the investor, allowing the angel to personalize his/her methodology. In the book “Winning angels, the 7 fundamentals of early stage investing”, David Amis and Howard Stevenson outline 18 potential approaches that vary in duration from 30 minutes to several years. They also provide strategies that require consistency and perseverance in order to be effective. The task of choosing which one of these strategies works best for your portfolio or angel investment may seem daunting, but these are tools that are meant to provide a person with a superior understanding of their own inclinations and interests within the investing community. Consequently, a strategy recommended for early investors is quantity, rather than focusing on quality. The novice angel investor must pursue many ventures in order to become adept at knowing their proclivities. This method is equally concerned with understanding personal aspirations and penetrating the market for novel and exciting opportunities. In contrast, seasoned investors are notorious for their stubbornness in general investments. These individuals are willing to let unappealing prospects pass, if they are unable to see a substantial amount of merit or a vibrant role that they can play in the progression of the startup.

            Networking is a crucial skill for investors and business minded individuals. It comprises all the relationships that are forged and sustained throughout one’s career. Of the 18 activities that were mentioned in the sourcing activities by Amis and Stevenson, 13 of them are directly involved with the function of expanding, maintaining and focusing on one’s network. These relationships become the best means of exposure to new opportunities, while mitigating the amount of time that is required to encounter them. Referrals are essential to investments because they save that crucial resource, TIME. Referrals from a trusted network connection allow the entrepreneur to circumvent the rigorous and time-consuming intricacies required to comb through the jumbled world of startups. These are recommendations from reliable entities that are personally tailored to your specific interests. By steadily building and maintaining your network, you are opening the door to abundant latent opportunities. This stage of investing is concerned with personalization and goal consolidation. Understanding what you are looking for and showing genuine interest are mutually dependent factors in partnerships and potential investments. They both derive from developing one’s sourcing methods through experience and experimentation.