Entrepreneurs are always coming up with brilliant ideas, but raising funds has never been easy. Raising funds can be a frustrating struggle for you, whether you’re beginning a business from the ground up or finding funds to help your small to mid-sized business grow. A decent idea would not be enough to persuade investors. They’re almost as interested in the idea as they are in your ability to execute it.
In our previous blog post, 10 Reasons Why Small Businesses Fail (and How to Avoid them), we mentioned that one of the main reasons most start-ups fail is because they’ve run out of cash. Despite the fact that start-up investment has risen dramatically over the years, only a limited number of new businesses have been able to secure the necessary funds. Investors have strict requirements for start-ups, such as a good executive team and a long-term strategic edge, which must be fulfilled in order for them to receive investment.
With so much at stake, it’s critical that entrepreneurs nail their investor pitch. As a result, we’ve assembled a list of tips to assist you in planning, preparing, and delivering the perfect pitch.
For several founders, a pitch begins when they shake hands with an investor and begin presenting their 15-slide pitch deck. But the fact is that you can make or break an investment even before you enter the room. When choosing an investor, the result is always determined.
So why is that the case? Chemistry, to be precise. Not every investor will be interested in investing in your company. You may be the next unicorn, but if the person or company you’re pitching to doesn’t like your business plan, they’re not going to write you a check.
So, how do you know if you’re pitching the right person? Do your homework before arranging the meeting—before even planning to reach out. Investigate and discover everything you can about a prospective investor, including their background, goals, network, affordability, and disposition.
Good sources to learn more about angel investors are AngelList, Flashfunders, and SeedInvest. On these websites you can post a pitch to be found by potential investors. Angel investors typically contribute smaller sums, ranging from $25,000 to $100,000. As a result, based on the amount of money you need, you will need to find more than one investor. You can also search for angel networks that are specific to your region. The Angel Capital Association maintains a useful list of local angel associations. Some investors may be well-known people from which you can learn a lot online. Many others choose anonymity, making it difficult to learn more about them.
It’s time to start planning until you’ve met the right investor. The best way to do this is to create a 15 to 20 slide pitch deck that includes the following information:
Putting this detail on a PowerPoint with a few fun graphics, financial maps, and bullet points isn’t enough to make a great pitch sheet. It necessitates strategic preparation, careful word use, and meticulous design. However, if prepared correctly, the pitch deck will serve as a perfect visual supplement to your analysis, assisting the investor in visualising consumer statistics, comprehending your business model, and participating in your pitch.
What’s the perfect way to draw the audience’s curiosity and attention? Tell them a story. You will make the pitch memorable by telling a strong and convincing narrative. Tell the story of how the vision came to be, where you want it to go, and how you believe it would impact the future.
Reflect on your journey. What issues prompted you to start your company in the first place? What kind of achievements have you had since then? What setbacks have shaped or altered your business? The most critical question is: where are you going now?
These items should be included in your pitch and shown in your pitch deck. It will not only attract the investor’s attention and keep them entertained during your analysis, but it will also establish a logical pitch sequence.
Don’t pitch your business idea as a get-rich-quick scheme. Sensible investors would doubt your ability to meet multi-million sales and benefit projections. Instead, show reasonable sales growth and have three potential scenarios in terms of revenue: worst case, medium or planned case, and best case. Make sure you back up your predictions with facts, such as industry statistics and competitor analyses, and that you justify the conclusions you used to arrive at your sales forecasts.
Offer investors a brief look at the latest and actual numbers instead. Explain if you want to meet your financial objectives and how much money you’ll need to do that. VCs are more likely to finance you if they have a clear understanding of the exact business numbers and trust the startup story you’re telling them.
Planium Pro’s finance plan has all the necessary tools to help you assess, plan and forecast your financial statements and as well as compare your metrics with industry average, therefore making you feel comfortable and confident in your business numbers.
Businesses must adhere to strict schedules. As a result, timelines must be used when pitching. Set some specific deadlines for your investors that follow the necessary time frame. It demonstrates how serious you are about raising funds for your business. The greater your commitment to your company, the more satisfied potential investors would be to back you. As a result, it’s a good idea to set targets for yourself and inform prospective investors about them.
Until you’ve put together a convincing deck of facts that confirms your vision, hone your message by testing it as much as possible in front of the mirror, friends and relatives, and trusted teammates and advisors that will provide valuable feedback.
Preparation is said to be crucial with everything you do or intend to do. “Failure to plan is planning to fail,” as Benjamin Franklin is credited with saying, and it still holds true today, particularly in the dynamic startup environment. So, think about it before you go into the meeting with your prospective investors. Examine your business pitch from a new angle. Prepare not just your pitch slides but also your personal presence, and don’t only sell to investors; sell to the investor in front of you.
Data and facts are prioritised differently by each investor. You have a chance of landing the pitch if you start by selecting the right investor and then match their interests with your proposed business idea, value proposition, and exit strategy.
If you want to learn more about how to start and run a new company, visit our Blog page, where you’ll find useful tips and tools to help you succeed.