If your seeking investment and your investment opportunity is in an attractive niche then building an avatar may increases your chances of receiving venture funding.
Couple of definitions first
- Attractive niche? One that has passionate fans. Examples of attractive niches with fans are: Enhanced Beverages, Special Needs Foods, Biotech and Healthtec, Senior Products and Services, Anything Green, Home Automation … there are hundreds more.
- Avatar? A typical fan in the attractive niche.
Sometimes you may already have a mailing list of these “typical fans” but you may not have thought of creating an Avatar for them or profiling them in any way.
By creating an Avatar you will be able to make a mental connection to this “typical fan” when you prepare marketing materials for your investment opportunity. This can be when you write copy for the elevator pitch, investment summary, offer document or video. You will know exactly who you are pitching them to as you have created an avatar for this investment niche and fan.
To create an avatar here are the steps …
1) Relax and imagine the “typical fan” thinking about what they are passionate about.
2) Use these thoughts to complete the following …
Are they a Man or a Woman? _____________
NAME your “typical fan” ______________
How old is this person? _____________
What do they look like? If you were to tell me to look for this person in a crowd, what would I be looking for? ____________
What does this person do for a living? _______________
What is an amount they would be comfortable investing? _____________
What other identifying traits does this person have? (Married, Kids, Past Bankruptcy, Green Organisations etc) ___________
What is a “story” that reflects their passion? ________________
3) Now, using what you have written above, fill in the blanks below and read this aloud:
Hi, [THEIR NAME] , it’s [YOUR NAME], I know it’s not easy being a [THEIR AGE] year old [THEIR GENDER] who is [THEIR IDENTIFYING TRAIT] who is trying to find an investment in [ATTRACTIVE NICHE] for around [INVESTMENT AMOUNT] especially when you spend most of your time working as [THEIR JOB]. I know how passionate you are about [ATTRACTIVE NICHE] because I heard that you [STORY]. I know how you feel. I once did something very similar and felt I should do something remarkable here in Australia. It wasn’t easy for me to find the perfect opportunity in the [ATTRACTIVE NICHE] for around [INVESTMENT AMOUNT] but I’ve found something to be really passionate about.
4) So after this you should have a very good picture of …
- What size the investment parcels are best to be for this type of investor
- A very clear picture of who you are targeting your marketing materials at.
5) I’ve called my Avatar “Martin”. As an example if I was promoting an investment in Wind Power I might complete the exercise as follows …
Hi Martin, it’s Paul, I know it’s not easy being a 55 year old male who is married with two kids and is passionate about alternative energy production who is trying to find an investment in Wind Power for around $20,000 especially when you spend most of your time working as an Accountant. I know you are passionate about Wind Power because you went 1000 kilometers out of your way when you were in Europe to visit a village where all their electricity came from Wind Power. I know how you feel. I once did something very similar and felt I should do something remarkable here in Australia. It wasn’t easy for me to find the perfect opportunity in Wind Power for around $20,000 but I’ve found something to be really passionate about.
I’d prepare an additional elevator pitch and investment summary especially for Martin and ensure that Martin is especially catered for in the Offer Document. In the Offer Document I would also ensure that it is still attractive to Professional and Sophisticated Investors.
6) Looking back through some recent capital raisings and venture fundings I discovered one with a list of 10,000 “fans” that yielded no investors from the fans list. After doing this exercise the INVESTMENT AMOUNT expected from Private Equity funders who were “fans” came out at $2000. The actual offer had a lot larger parcel size and got no traction from their “fans” list. A hybrid offer with a small scale offering of say $25,000 for Rounds One and Two, initially, followed by a Prospectus Round Three issue with a minimum parcel size of $2000 would have suited Martin and the company much better!