How To Pitch Business Ideas To InvestorsJuly 1, 2022 2022-07-01 15:09
How To Pitch Business Ideas To Investors
If you’re planning to raise funds for your business, it is essential to understand how to present & pitch your business plan so that investors will be attracted to investing in your business.
Every business owner should be able to pitch their ideas, whether to prospective investors, clients or banks to fund your business’s start-up.
Investors who are venture capitalists are seeking out practical business plans and strategies for funding new companies. Even if you have a very good business idea, having a compelling pitch can make it easier to get funding for your startup.
The process of creating a winning pitch begins by creating a solid business plan. Then it’s up to you to figure out what makes your company valuable and worthy of investment.
You might have five pages of proven financial data as well as a detailed analysis of your position against other businesses in a variety of fields, but you cannot cover everything.
When pitching to a venture capitalists or an angel investors, if it’s for your first time, you’ll typically be given 10 minutes to present your pitch. Here are some tips on how to pitch business Ideas to investors:
Table of Content
- 1. Create a PowerPoint
- 2. Practice Pitching Your Idea
- 3. Outline The Problem With A Story
- 4. Talk About Your Solution
- 5. Describe Your Market Of Choice (Target Clients)
- 6. Your Income Or Business Model
- 7. Your Successes: Early Traction And Milestones
- 8. Customer Acquisition: Marketing And Sales Strategy
- 9. Describe Your Team & Their Qualifications
- 10. Talk About Your Financial Projections
- 11. Analyse How You Will Beat Your Competition
- 12. Tell Them Why You Need The funding
- 13. Your Exit Strategy
- 14. Do Follow-up
- 15. Get feedback About Your Presentation And Improve Your Pitch
- Watch How To Pitch Business Ideas To Investors
1. Create a PowerPoint
Take the time to create your presentation deck. The goal is to design the deck in a simple way that gets investors interested in your venture.
In this regard that, you must keep a version of your pitch that you can talk about within 10 minutes and also an extended version that contains all the information you’d like to provide prospective clients access.
2. Practice Pitching Your Idea
Practice makes perfect. It is important to prepare & practice your speech. Being unable to quickly explain every aspect of your business renders every other suggestion in this list unimportant.
A lot of entrepreneurs think that simply by knowing about their business , they are able to quickly and concisely convey its value. Also, having a great pitch deck with stunning visuals can be enough to get back on. Therefore, they enter meetings for pitches unprepared.
Instead of being in a position to say “I only need 10 minutes of your time,” and in reality, you’ll find yourself rambling for 20 minutes after just 5 slides. Make time to practice to simplify your messages, and only save the things that make up your company. Don’t leave anything else on the cutting-room floor.
3. Outline The Problem With A Story
Your pitch should begin with an intriguing story. The pitch should focus on the issue you’re solving for the market. It should be engaging for your target audience from the beginning. If you’ve conducted any tests, try including real data in this.
It’s best if you are able to relate your story to your target audience, I.e the investor.
What industries did they invest in in the past? What are the biggest issues their previous ventures? Research the investor so that you know of their priorities and how you can tailor your message to their needs.
4. Talk About Your Solution
Tell us what is special about your product, and explain how it can solve the problem you mentioned on the previous slide.
Keep it brief, simple and simple for the investor to communicate to other investors. Do not use specialised terms unless your investors are well-versed in your field. Also, if you’ve completed any tests prior to that, add the results will give your idea more credibility.
5. Describe Your Market Of Choice (Target Clients)
Don’t think that everyone around the globe is your ideal customer even though it might be the case someday.
Be clear about who you’re creating your product for, and break down your market into TAM, SAM and SOM. This won’t only impress your target audience but will also assist you in thinking more strategically about your plan for rollout.
If you are able, create a persona for your user or your ideal client when speaking about your intended market. This helps investors see the customer base that could be served and proves that you’ve considered carefully about the people your company is aiming to serve.
It’s also easier to reach out to a specific person with a brief pitch rather than an entire demographic.
6. Your Income Or Business Model
Investors tend to pay attention to this particular slide most. What are you doing to earn profits? Make sure you are precise about your products and prices and reiterate the fact that your target market is eagerly waiting for your arrival.
7. Your Successes: Early Traction And Milestones
At the beginning of the presentation, you’ll want to establish credibility. Spend some time sharing the impact you’ve had.
This is your chance to make a statement on your own behalf. Make the investors proud of the things the team and you has done up to now (sales contracts, key hirings, launches of products and the list goes on).
It’s likely that you’ve briefly mentioned a few aspects of this earlier on however this is where you present a complete overview of your company.
However, don’t simply leave it with what you’ve accomplished, make sure you inform what direction you’re taking. Give them a plan of the next steps, any additional milestones , and also explain how the funding will aid in achieving these goals.
8. Customer Acquisition: Marketing And Sales Strategy
This is typically the least-used and most skipped parts in an investor presentation and in a business plan in its entirety.
It answers the question; What is the best way to connect with your clients? What is the cost? What are the best ways to measure success?
Your financials should be able to enable you to estimate the costs of customer acquisition. You should also outline the methods you plan to use to contact your clients, the channels you’ll be advertising and present an example of a message.
You’ve done your homework and you’ve identified your target market is a savvy buyer, so why not let them see what it’s going to look like in practice.
9. Describe Your Team & Their Qualifications
Investors put their money into the people first and the ideas later. So make sure you share information about your rock-star team and explain why they’re the perfect individuals to run the company.
Also, make sure you discuss the skills you might have in your team. Many startups are lacking the most important talent, be it marketing, management sales, programmers operations, financial management and so on.
Make them aware that you recognize that you’re not an expert in everything.
10. Talk About Your Financial Projections
You should be able to show what you’re expecting in terms of revenue (per product) in 3 to 5 years. It is essential to be able to back your claims by proving your beliefs.
Investors are likely to pull out their calculators on smartphones to ensure that your numbers are logical So, provide them with the data they require to verify the accuracy of your calculations.
If your financial graph displays “hockey-stick growth,” be sure to clarify what transpires to trigger these inflection points. It’s easy to take a great deal of time explaining your financials, but bear in mind that you have to reach them promptly.
If investors are interested to hear or learn more, include your entire financials on the extended deck of slides or ask questions following your presentation.
11. Analyse How You Will Beat Your Competition
This is also an essential part of your pitch, but many individuals leave out this area or don’t give enough details on what makes them different from their competition.
The best method to present your advantages over your competition is to present the slide using a matrix format. You show your competition on the left-hand part of the screen.
Then, you’ll have your advantages and features at over the top. You then put marks in the boxes to indicate the companies that provide the service. Ideally, you will have checked marks across the top of every category, and the ones your competitors aren’t as strong in certain areas that show your superiority.
12. Tell Them Why You Need The funding
Be clear about the amount of money that has been invested in your business and by whom, what ownership percentages and the amount you’ll need to take your business to the next step (and be clear on the level that’s).
Do you require multiple rounds of funding? Are you looking for is a convertible note equity-based round or another?
Inform the public the reasons your management team is able to manage their investments to grow. Inform investors of the amount you’ll need, the reason you require the money, the purpose it is going to be used for, and what you expect to achieve.
13. Your Exit Strategy
If you’re looking for large amounts of capital investment (over $1 million) Most investors be interested in knowing the best exit strategy for your business. Are you planning to be taken over or going public (very very few companies actually do this) or something else?.
Make sure you’ve done your due research on this exit strategy and your target companies and the reasons why it could make sense three or five years from now.
14. Do Follow-up
Investors will require you to prove your assertions. Prepare a comprehensive business plan in hand to present with investors, so they can explore more information if they wish to.
15. Get feedback About Your Presentation And Improve Your Pitch
However, no matter what the outcome of your pitch, whether you get money, another meeting or not, try to find areas for improvement.
Be sure to seek feedback and take it into consideration for the next time you present. If the investor doesn’t offer any feedback, don’t press the question. You’ve already spent and now want more for, and it’s a delicate balance reach.
If you are able to bring someone else from your team there to record notes and discuss your slides with you after the incident.
Findweak points and areas you’ve stumbled across or slides that led to negative responses by the investors. Refine, practice and executing, even when you think you’ve got an ideal pitch.
Watch How To Pitch Business Ideas To Investors
The aim of a well-crafted pitch is to get investors beg for their money to fund your business. It may sound like it’s too good to be true however, it’s likely.
If you can successfully meet the requirements of an investor and needs, you’ll have an irresistible pitch.
You’ll never be able to tell the quality of your pitch until you’ve actually done it. Don’t be stressed out. Instead, treat each investor presentation as an opportunity for learning for both you and your company.
You’ll continue to improve and become better at it and you can apply your learnings in every aspect in your enterprise.
Originally posted 2022-01-20 14:02:48.