If you are an entrepreneur or a small business owner that is looking for investment then look noÂ further!
This article will shed light on the tips and tricks you need to know in order to secure theÂ funding you need for your companyâ€™s future.
1. Picking the Right Audience
Singling out the right type of investors to approach is key. You must figure out the right type of investor for your company so depending at what stage your business will depend on whether to go and pitch to a large venture capitalist company looking to invest heavily or talking to angel investors who might be looking to invest their own money in your business. Crafting your presentation to suit these types of investors is something that will ultimately bring you more success. Appealing to their different goals and needs will help you get what you want and what they want. Speaking to them in their language wonâ€™t alienate you, but help them understand and engage with your company on a greater level.
2. Tell a Story
Everyone loves a good story?! So why not tell one? If you have plans for your company to be the next â€˜BIG THINGâ€™, then tell the investors how you plan on becoming a force to be reckoned with. Confidence is key, believe what you are saying in your pitch. Investors want to hear about the future so tell them how their money is going to help your company achieve a much, much higher valuation. Think of your pitch like a story board for a film or TV series. Donâ€™t spend all of your time in the present talking about your companies value at the moment, keep the investors glued to their seats and wanting to find out more, with a tightly crafted plot then build up to an exciting conclusion.
If you have being in a certain industry for a long time then you may not realise that no investor has a clue what you are saying if you start talking to them about algorithms or technical descriptions. Try and keep away from insider language only people who are initiated in the industry will understand. Not every angel investor or venture capitalist company will understand your business plan so keeping it simple and on the terms of the investor is definitely something to take on board when planning your presentation.
Investors are known for having barins that go at a 100 miles per hour, so expect to be interrupted. What do you do when youâ€™reÂ interrupted mid pitch? You listen and answer the question the investor has asked you. Do not carry on with your pitch immediately take the time to answer the questions presented to you carefully and accurately, because an investor interrupting you shows that they care enough about the product or idea you are presenting to them to ask a question about it.
5. Business Model
How does your company make money? Itâ€™s best to keep it simple. What you should not do is list loads of sources from where your revenue is going to come from, this is because in the eyes of investors it seems like you donâ€™t know where youâ€™re going to get your money from. Keeping it simple with one or two sources of revenue will show that you have a direction. When listing sources of revenue it is also good practice to list them from biggest source of revenue to the smallest.
6. Your Unfair Advantage
The stereotype is that venture capitalists take risks, but this misconception is far from true.Â Venture capitalists like to play it safe along with angel investors because at the end of the day no one wants to lose money do they? So in your pitch it would be a good idea to really hammer home your unfair advantage over the rest of the market. Your market lead could be based on a whole host of things from your team to your number of customers. One of your biggest priorities in your pitch is to identify your biggest assets and emphasize your biggest advantage over the rest of the market.
7. Talking up Sales
Not every start-up will get off to a good start when it comes to sales, but if you have then talking up your sales to investors is key. Prepare to be called out on your claims by investors when telling them how good you are doing thus far. Quality and type of revenue is very important to investors, you want sales that can be repeated again and again and easily acquirable customers. In part, your companyâ€™s value is determined by the rate at which your company is expected to generate sales and how future investment can help this process. Define a plan that can help achieveaccelerated growth.
8. Time is Money
When pitching for money you want to outline how much money you need, how you will spend it and how this investment is going to take you to thenext level. Have three different budgets in mind when preparing your pitch, these three budgets are for three different investment opportunities, small, medium and large. You then need to be able to show how each different investment package is able to get your company to a different milestone depending on the amount of investment. Ideally you want enough investment that gets you to your next milestone and only then can youraise the value of your company. Ultimately, you need to showcase your understanding of exactly what the money is going to be for and how you will make that money back for investors.
9. Back to Basics
This is one of the more simple tips on our list but one that is definitely worth noting. As you are representing your company you need to turn up on time, looking sharp. The investor looks at you just as much as he/she looks at your idea, so turning up unshaven, smelly, and miserable is not going to get you very far. The investor will build an idea for themselves about how you will treat, partners, employees and clients just based on how youtreat yourself. If you canâ€™t respect the investor then you are unlikely to respect anyone in the future, in the eyes of the investor. Rememberâ€œmanners cost nothingâ€ and they can take you a long way. So when engaging with the investor donâ€™t interrupt and practice your pitch so that you are confident. You want to gain the investors trust and if you are confident in your pitch, yourself and your company or product, then the investor is going to have confidence in you and trust you with their money. Come prepared! There is no such thing as being over prepared!!! Even if this means bringing extra copies of your presentation, five different ties â€“ just so you donâ€™t forget one, bring back up versions of your product, or if you are visiting from out of town, it could mean having to sleep in your car in the car park across from the investors offices, just so you arenâ€™t late in the rush hour traffic â€“ after all this meeting could change your life for the better!
10. Shifting Units
Even with the worldâ€™s most revolutionary idea you still need to consider a way of marketing your product, company or service. This is a lot harder than you may think because marketing changes so rapidly in todayâ€™s business world. There are platforms with millions of users that werenâ€™t around this time five years ago. When communicating your plans for marketing your product to investors, there are three things to consider. Volume, cost and conversion. The volume of customers and how much does it cost you to get these customers and then the conversion rate of that target number of customers. In other words make sure you have a plan in place that will get word out there about your product in a interesting and eye catching way.
Remember when you have meetings with these venture capital companies and angel investors you have nothing to lose. Treat these meetings as a business lesson that you can gain experience from. These investors are just like you! They are brave and ambitious entrepreneurs and want to make money just like you so there is no need to be nervous.
Good luck with your pitches! And lastlyâ€¦. remember to practice your pitch! You canâ€™t practice your pitch enough!