Pitching your business idea to a potential investors can be intense. Having a great idea is good but selling that idea to a third party is a different ball game. It requires a level of mastery of public speaking and the art of persuasion to convince anyone to pull their money into your business. It’s like trying to convince an interview panel that you are the best man for the job. You wonder if you made a good impression, if you answered their questions correctly or if they will hire you.
Investors are highly intelligent. Before you present a business pitch to an investor, you must prepare adequately for the presentation. That pitch can either make or break that partnership. Here are some useful tips to help make your business pitch a success.
1. Investigate your investors
Investors have different backgrounds, Before presenting your business idea, analyze potential investors. You need to understand who they are, what they do, their business background and their values. This information will help you to make a speech so that it is pleasing to their faces.
Different investors have different interests. Some investors like the details, while others want to see the outline, some like the big thinkers, and others believe in the beginning of the small ones. So you need to fine-tune your field to suit their interests. A good business area combines facts and emotions. Addressing the emotions of the investor when declaring business facts. In this way you will win their attention and trust
2. Introduce your business idea through a story
A good, well-structured story never goes wrong. Storytelling is for sale. That’s why companies use stories in their marketing campaigns. Use the first five minutes of your presentation to tell a story that highlights the need for your target market and how your product will help customers solve this problem.
A simple story will help them understand the benefits of your business, even if they do not know the technical side. You can even tell the story of how you started your business and your journey so far. This story can cause them to hear you out and be convinced their investment won’t go to waste.
3. Describe the problem with a story
Start your speech with a compelling story. It should solve the problem you solve in the market. This pulls the audience straight out of the gate. And if you did the tests, try to include the actual data here.
If you can relate your story to an audience, in this case an investor, even better. In which industries have they invested in the past? What is the pain of their previous entrepreneurship? Do research on the investor so you understand well what he cares about and you can tailor your story to them.
4. Your decision / Method to Solve the Problem
Explain how unique your product is and how it solves the problem you shared on the previous slide.
Keep it short, concise and easy for the investor to explain to others. Do not use the some terminologies if your investors are not familiar with your industry. Again, if you performed the tests beforehand, tender it. The results in the app will give your decision more reliability.
5. Your target market
Don’t say that everyone in the world is potentially your target market, even if it could be true one day.
Be realistic about who you’re building your product for. This will not only impress your audience, but it will help you think more strategically about your roll-out plan.
If you can, try and develop a user persona or your ideal customer when speaking about your target market. This can help investors visualize the potential customer base and displays that you’ve thought intently about who your business will serve.
6. Your revenue or business model
Investors tend to care about this the most. How will you make money? Be specific about your products and pricing and emphasize again how the market is anxiously awaiting your arrival.
7. Your success:
At the beginning of the presentation, if you want to create credibility. Take a moment to share the relevant previous successes.
This is your chance to blow the horn. Impress investors with what you and your team have achieved so far (sales, contracts, key rentals, product launches, etc.). You’ve probably mentioned these parts and sections before, but at this point you’re creating a complete picture of your job.
But don’t just leave what you did, be sure to talk about where you’re going. Show them a guide to the next steps, other milestones, and even note how funding will help you achieve them
8. Marketing and sales strategy
This is usually one of the most skipped sections of an investor pitch and a full business plan. How will you reach your customers? Do you know how much will it cost? What Plans do you have to measure success?
Your financials should easily allow you to calculate your PR costs. But, you should also mention how you intend to reach customers, which media you’ll be advertising on, and even present an example of content. You’ve done your research, you know your customer, why not show investors what that will look like in action ?
9. Your financial projections
Show what you’re proposing in revenue (per product) over the next two to three years. You must back up your numbers by sharing your assumptions. You’ll see investors taking out their smartphone calculators to make sure your numbers correlate, so give them the informations that are accurate.
If your financial chart shows “hockey-stick growth,” be sure to explain what happens to cause those inflection points. Now it can be incredibly easy to spend a ton of your time explaining financials but keep in mind that you need to speak to them quickly. If investors want to hear or know more, add your full financials to the extended pitch deck or offer to answer questions after you’ve finished presenting.
10. Your competition
Again, this is a very important part of your pitch, and many people omit this section or don’t provide enough detail about why they’re so different from their competitors. Also, the things you plan to do better than them
The best way to communicate your value over your competitors’ is to show this slide in a competitive matrix format—where you list your competitors down the left side of the page, you have your features/benefits across the top, and place checkmarks in the boxes for which company offers that service. Ideally, you have checkmarks across the top for every category, and your competitors lack in key areas to show your competitive advantage.
11. Your funding needs
Clearly spell out how much money has already been invested in your company, by whom, ownership percentages, and how much more you need to go to the next level.
Remind the audience why your management team is capable of managing their investment for growth. Tell investors how much you need, why you need the money, what it will be used for, and the intended outcome.
12. Take feedback and refine your pitch
No matter the outcome of your pitch, whether you receive funding, another meeting, or rejection, look for areas to improve. Don’t be afraid to ask for feedback and take that into account for the next time you pitch. Now if the investor isn’t willing to provide any, don’t push the issue. It is their time you’ve just spent and are asking more of, so it’s a fine balance to achieve.
If you can, have another team member there to take notes and review with them after the fact. Look for weak-points, areas you stumbled over, and slides that led to negative reactions from the investor. Keep refining, practicing, and executing even if you think you’ve found the perfect pitch.
You’ll really never know how good your pitch is until you actually do it. Don’t stress yourself out, and treat every investor pitch as a learning experience for you and your business. You’ll only continue to get better and better and can apply those learnings to every area of your business.