How to pitch your business to an investor
If you want to raise money for your business you’ll need to know how to pitch your business to attract investors. Here are our tips for pitching your business to investors.
Pitching to potential investors is probably going to be one of the hardest parts of being an entrepreneur, and is still daunting even for the veteran Entrepreneur. So here’s how to do it right.
With this in mind, The Entrepreneur has compiled a list of tips and tricks to help you nail your business pitch to investors.
1. Consider “Why?”
Know why you are seeking financial assistance from an investor. This will assist you to then strategise how you can help your business grow.
2. Find the Right Investor
Although we believe finding an investor is dependent on your pitch to a potential one, in actual fact its more important to find the right investor or group of investors. “Why?” You ask – because it’s all about chemistry and being able to understand and see the vision you have for your business. Not every investor is going to be interested in funding your company – even if your idea is, in fact, the next best thing since sliced bread. This is where due diligence about your potential investor is key – from their career, passions, hobbies and interests and even temperaments, its all key.
3. Get your strategy together
The most important details you need for your pitch will have to do with your business model, your team, your financials, and your future projections.
Let your data and experience be the foundation of your pitch. Ensure you have answers to any questions your potential investors may have.
However, ensure that investors are not bombarded with boring facts and that they do get to understand and hear about your journey – in order to create a connection between the two of you.
Investors are more likely to invest if the product offering, strategy and representatives are trustworthy so let your personality shine through.
4. Prepare Your Pitch
Now that you’ve found the right investor, it’s time to prep your pitch. This should detail the problem you want to solve, the proposed solution, the ins and outs of your product, target audience, business strategy, business financials to date and how much you may have already invested including forecasted and your exit plan.
Don’t kid yourself, this pitch isn’t about winging it, or speaking from the heart, any seasoned investor will want to see that they can trust in a potential venture and that their investment is safeguarded.
Of course, you do need to always come back to the main point – “what’s in it for the investor?”
5. Be Specific with Your Investment Needs
Its always intimidating when asking for money or strategic assistance, and it makes sense if you’re worried to ask for what you really need to help the business grow especially when you fear you may lose out on a potential investor. So our recommendation is to be upfront, tell them you have the ideal figure in mind and that it may not be feasible to them, but you are open to discussion in order to have a fruitful, mutually beneficial and successful business relationship.
6. Prep for Questions
Of course, potential investors will have questions. Just as much as you’re trying to suss them out, they’re also trying to understand how well this product offering (and you) will work out for them in a business setting.
Here, we’d say stay calm, if you’ve done your homework and know the ins and outs of your company, potential competitors and the industry in which you aim to enter, you will most probably come out of this pitch with an investor secured.
What questions should you anticipate? Generally, investors will ask questions about the viability of your business, and what backing data you have; how you’ve previously raised capital and the profits gained previously from testing your business, etc. It’s always important to look at your pitch from your investor’s point of view and consider if there are any specific concerns some may have about the industry, business model, competitors, product, etc.
And finally, follow up, follow up, follow up.