These days I’ve had a few people approach me with their business ideas, some of which have been seeking funding. I’m flattered that they would think I’m a rich dude, which I really am not, but for their benefit I hear them out and offer feedback, which is usually the best I can do.

There’s certainly a tact however, to how people should approach potential investors. I’ve found that much of this really comes down to respect. Does the entrepreneur seeking funding respect the time and ability of the investor by putting his due diligence into presenting an offer? Or, does he kind of half-ass it and come into the room super cocky and assume his idea is the best thing since sliced bread (I don’t know where that adage came from)?

Take for instance, my old client in my DirecTV days. He came to me recently with a very unique idea in the entertainment industry vertical. He suggested that his idea would revolutionize a certain channel within this industry, and generate billions of dollars. His presentation was polished, and he even had a P&L. I was pretty impressed – he had done his homework.

Contrast this to an old colleague who was a business analyst at DTV and was trying a few different things without really putting any skin into the game. A cigar business, and then a food truck business. He sends me an email out of the blue after not having talked with me for years, and asks me if I want to make $40k-100k per MONTH. He then calls me, and explains the idea of this food truck in Barstow, and that it has the potential to have a $70k gross per month, but he’s looking for investors who will throw down $75k to get started. That was literally all he explained.

“So, you interested? You want in?”

I explained that I couldn’t make any decisions without seeing numbers and projections, and doing my own analysis on the viability of any venture. That response immediately deflated him and he appeared to be moving onto the next person to ask.

In reality, I was taken aback at the guy’s approach. Who was he to come at me with an ask for capital, without having done his homework?! To me, and any potential investor for that matter, it would be a brash affront to have those kinds of expectations on the finger like that.

Lesson – if you’re going to ask someone for money to start a business, do your homework.