One of the best places to find mentors is in your business’ investors. Investors are typically high net-worth individuals who’ve already experienced business success on their own. Their experience, knowledge, and skills can help you avoid pitfalls and make the right decisions in every turn of your business.
The Money vs. The Expertise
When Pierre Omidyar, founder of eBay, approached Benchmark Capital in 1997, they were already quite profitable. The site was growing at an enormous rate and they had investors literally begging for them to take their money.
They continually refused the money, because they didn’t want to sell off a part of their company. Eventually, they decided to take on Benchmark Capital’s money for one reason and one reason only: The expertise of the partners.
Through Benchmark, eBay found Meg Whitman and managed to lure her away from a lucrative position in Hasbro. She played an integral part in the company’s success.
Investors sometimes just bring money to the table. While money is important, it’s often not the most important thing.
When you’re choosing investors, try to choose investors who can also bring something else to the table: Expertise. Connections. Experience.
If it weren’t for Benchmark Capital, eBay wouldn’t be what it is today. It’s not because of the money; it’s because of the expertise.
Where to Find Mentor Investors
If you’re raising capital for the first time, you’re probably going to be looking for angel investors (rather than V.C. investors.) You may also be looking at startup incubators.
Angel investors can be great mentors; but can also be tough to land. You need to really have your pitch together. They’re not just putting their time on the line, but their money as well.
Try to get involved with local angel organizations. Make pitches at angel gatherings. Visit local entrepreneurial events, such as talks by V.C.s or “Startup Weekends” to meet angel investors who scout such events for startups.
Startup incubators are another option. Famous ones include Y Combinator and Tech Stars. The incubator world tends to focus on the tech scene, whereas angel investors invest in all industries.
An incubator is where you and several other startups all launch at the same time. You’re all mentored together by a group of experienced entrepreneurs. They usually put in a small amount of capital and receive a small share of equity.
Finally, don’t underestimate the power of informal meetings. You can often meet investors who’ll mentor you in places you’d least expect. For example, you could meet your future investors at a marketing convention or at your local Toastmasters club. Sometimes investors who aren’t professional angels are actually easier to land because they aren’t being pitched to all day.