Entrepreneurs are people with big ideas. Sometimes ideas so revolutionary they have the potential to shake an industry.
However, enthusiasm can only get you so far.
What we find today is a number of great business opportunities going unrealized, or failing, due to a lack of funding. In fact, according to Business Insider, of the small businesses that fail in the United States, 82% of that is attributed to cash flow problems.
That’s where the magic of investors comes into play. Investors can take your great business idea or start-up and provide you with the financial backing to sustain it.
But, securing investment is an art.
A seemingly terrifying one at that – I mean, have you watched Dragon’s Den?
Your pitch needs to tell a story. It needs to persuade, inspire, excite and motivate investors. But, investors don’t just run on emotion. You need to do thorough research on your industry, deliver the projections and state why your product is the product.
Here are tips you should follow when you start asking the question: how to pitch to investors?
Selection is Key: Pitch to The Right Kind of Investor
Finding the right investor is like finding the right target market. You can’t sell your idea to everyone.
Firstly, consider what type of investor you are looking for. Different investors might only finance your business at a certain level of its growth.
For example, if you are just starting out, you may want to go for gold and pitch to an angel investor. Angel investment has several benefits and it’s worth investigating this avenue if you are a start-up.
Secondly, do research on your potential investors. You would be surprised by the information you might find that can be worked into your pitch.
Examples of questions to ask:
- Have they invested in a company like yours before?
- Are they interested in your industry?
- Have they invested in any of your competitors? In which case, you would want to scratch them off your list.
Be The Narrator: Craft Your True Story
Good investors buy into great stories.
The best way to present your idea is through narration. This effectively means you need to connect your ideas in a way that flows flawlessly. Educate your investor on how you plan on taking over the world, but support your story with how you plan to achieve it.
Look at your business from where it started, where it is and where it will be in the future. Your current timeline is not the end result. Explain your marketing strategy and how you plan to expand. Sell them on the potential, but be realistic. When investors can see you getting excited about your business, your attitude becomes infectious.
Be the storyteller and bring your ideas to life. When writing your pitch, infuse how funding will help you accomplish your goals. The capital deployment of the investor must be taken care of in your pitch. Every investor wants to understand how their money will translate into better returns.
Take time in crafting your plot. Be cultivating and inspiring. Capeesh?
Bring the Figures to the Table
A great business idea is only that until we start talking numbers.
If your business is already in operation, mention your past sales and lay them out in a timeline. If you turned $50,000 the previous year – well done – let your investor know.
Be factual and don’t exaggerate. Investors know a bad sales pitch when they see one. You’ll be smoked out faster than a fox in a hole.
Investors want to know what your sales projections will look like. If numbers are not your forte, use a professional accountant to help you forecast your financial future. Mention how you are going to accelerate sales when the company secures the investment it needs.
But, whatever you do, do not make false assumptions. There’s no quicker way to lose your investment battle than by making an ass of yourself through unverified data.
Plan Your Time Meticulously
End your pitch with deadlines and goal setting.
Investors want to know that you are as serious about their capital as they are. Set objectives and let your investor know your intentions, and how that translates into financial projections and goals. Give them reassurance by setting milestones. Proving you are committed to meeting them will translate well in any scenario.
If you are a serious entrepreneur looking for success through funding, follow these investor guidelines and you will surely succeed.
Uncertain how to even start looking for investors, let alone pitch to them? Consider acquiring the services of a financial marketer specializing in investor relations. These businesses often have contacts with hungry investors looking for new opportunities and are able to assist in the pitching process.
