Running a growing business should ideally not be a one-person job. There should be an entire team with designated responsibilities, ensuring every aspect of the business runs smoothly. Every business needs a consistent flow of funds to acquire a competent team and provide them with the required tools. The source of this funding is the first thing to finalize before starting the business. The last thing an entrepreneur wants is to run out of money before the business can take off.
Bank loans can be tricky and don’t often offer the flexibility possible with an investor. Find someone who has the funds and believes in the idea. Once onboard, procuring funds at convenient terms may be easier than going through bank red tape. Remember, the challenging part is convincing the investor that your business deserves the funding. The idea may be clear in your mind, but explaining the vision to others can be challenging.
Unfortunately, attention spans are shrinking. Effective communication requires clear and concise language. If business owners have a well-planned approach tailored to potential investors, success can be just around the corner. Here are some tips for delivering the perfect pitch and creating a lasting first impression.
Pitch According to the Audience
Study the background of potential investors and plan the presentation accordingly. Keep the same template but modify the content according to the listeners’ interests and expertise. Use more technical jargon only if investors are from an IT background. If not, too many technical details may confuse or bore them.
Tell a story instead of giving a lecture so the audience stays hooked. Investors often make their decision within the first five minutes of the presentation. Your confidence is of the utmost importance. Investors can gauge this from the presenter’s appearance, tone, and even the choice of words. Keep it crisp yet informative. Practice the presentation so there are no unnecessary hiccups. Don’t forget to test the audiovisual equipment beforehand.
Grab Their Attention
Investors may listen to new business ideas all day, so make sure this meeting doesn’t feel run-of-the-mill. It’s smart to let them test the product or service themselves. That way, they can decide on whether it’ll be a hit or a flop. Think like the popular television show, Shark Tank when preparing your pitch.
For instance, if you want to own a restaurant, include samples from the best items on your menu so venture capitalists know where they are investing their money. They can even give feedback, giving them more business ownership. Just showing them a picture of the menu will not be as convincing. Make sure the presentation of the food is as good as the taste. Be prepared to answer questions about the cost of ingredients and profit margins.
Showcase the USP
The question that arises in every investor’s mind is why customers would choose this business over others. The answer could be lower costs, round-the-clock service, or accessible locations. Be sure to emphasize your idea’s USP (unique selling proposition). Use facts and figures to highlight the gap your business can fill in the market.
Investors think in numbers. Demonstrate traction by showing, not just telling. Indicators like monthly sales, website visits, and app installs can show customers are already interested. You can further strengthen your case by using accounting software to track and present key financial metrics, such as revenue growth, cash flow, and profit margins.
Investors will appreciate seeing organized financial data, as it gives them confidence in your ability to manage the business’s finances effectively. Conduct surveys and focus groups before the pitch to share feedback from potential customers. A small business with a large purchase order from a big box store is much more likely to get funding than one without.
Present a Strong Business Model
It’s not just about how much profit is expected but also about when. Discuss timelines with investors without promising exact dates. Provide data to back up your claims wherever possible. For example, if wedding planners already have signed contracts with brides and grooms, venues, caterers, and florists, half the battle is won.
Investors aren’t philanthropists; they’re smart professionals who plan meticulously. They need to know the return on investment to achieve their goals. Be clear about timelines, but don’t be too idealistic. Keep buffers for unexpected delays. It’s better to complete the work earlier than after it was promised. Revenue generation may take time, but keeping the investor in the loop with monthly updates can help build relationships.
Introduce the Team
The business idea may be brilliant, but it needs a competent team to bring it to life. Investors know that and are often interested in knowing who they are investing in. Introduce the team, showcasing their achievements on an individual level and as a group. Investors are often known to invest in people, not businesses. If they see that spark, they can find it easier to write a check.
Studies have shown that female investors often support women empowerment projects so mention how the business supports women in the workplace if it does. Perhaps you could mention how you can make the workplace more welcoming to working moms. This could look like offering an on-site daycare or a longer paid maternity leave.
Save Time for Questions
One way to know if the presentation progresses is if the investors ask questions. That means they’re listening — maybe even considering. Share data but save some details for when they ask for it. Provide the audience time to ask questions by speaking slowly and pausing between topics during the presentation. End with a call to action. Urgency often motivates action. The sooner the investor decides, the more likely it is to be a positive response.
Remind them you must outdo competitors by having the right product available at the right time. If you are launching a swimwear collection, it must be in the market before summer, or it may not do well in certain regions. The next steps need to be clear and simple. Investors should know who to contact if they have any further questions. Summarize the advantages of starting soon and remind them of the benefits of a shared future.
Don’t Give Up
If there is one thing a successful business owner has, it’s determination. Stay focused on the goal and keep knocking on doors until one opens. Consider joining online platforms like Cherub that use an algorithm to match investors with startups, almost like a dating site. If an investor is willing to meet, don’t schedule an appointment until the pitch is customized for him or her. Don’t ruin opportunities by being in a rush.
The art of slowing down is an essential life skill. Instead of talking, focus on listening. Don’t assume what the investor wants. Ask questions and try to understand their point of view with an open mind. Trying to alleviate their concerns builds trust in the mutual relationship. In this case, confidence may be contagious. When business owners are confident in communicating their business ideas, investors may match the same confidence in their investment.
