When it comes to becoming an entrepreneur, knowing how to pitch your company is essential. A good elevator pitch is important even if you don’t intend to apply for financing. It shows that you know your company through and out. Which is beneficial if and when you decide to look for investment opportunities.
The best way to approach investors with a pitch
A well-thought-out business strategy is the first step in putting together a winning proposal. Next, you must determine what makes your company valuable and worthy of investment. No matter how much financial history you have and how well you compare to your competitors across various sectors, you will never be able to cover everything.
Because you’ll only have around ten minutes to make your case when you’re presenting to angel investors and venture capitalists for the first time. Here’s how to create a good first impression with your elevator pitch.
1) Make a presentation about your business.
First and foremost, spend some time putting up a presentation deck. Create a presentation that you can work with easily and that excite investors about your company.
This in mind, you should have a 10-minute version and a longer one that contains everything you want to offer prospective investors access.
2) Work on your pitching skills.
You’ll have to put in some work honing your pitch. If you can’t rapidly communicate with every part of your company, then none of the other suggestions are worth anything.
Too many business owners believe they can swiftly and concisely convey the value of their company just by being familiar with it. And if everything else fails, you’ll have a great pitch deck with eye-catching graphics as a backup. As a result, they show up unprepared to pitch meetings.
In instead of saying, “I just need 10 minutes of your time,” and really only spending 10 minutes, you’ll quickly find yourself rambling for 20 minutes and only having made it to slide five.. Simplify your message and only include aspects that help you grow your company if you put in the time and effort to practise. Everything else should be scrapped.
3) Work on your pitch
Use a gripping narrative to get your audience interested in what you have to say. In the marketplace, it should answer the issue you’re trying to solve. This will grab the attention of your viewers straight away. Also, if you’ve done any research or testing, be sure to put it here.
It’s even better if you can connect your narrative to the investor. What sectors have they previously invested in? What are the challenges they’ve faced in their prior business ventures? Make an effort to learn as much as possible about the investor so that you can customise your pitch to their needs and interests..
4) What you came up with as an answer
Give an example of how your solution solves a problem you mentioned in a previous slide.
Make it simple for the investor to explain by keeping it brief and to the point. If your investors aren’t well-versed in your field, don’t use keywords. Again, if you’ve done any preliminary testing, provide the findings here to bolster the validity of your proposal.
5) Your intended audience
Even if it’s true one day, don’t claim the whole globe is your prospective target market.
Try to be as specific as possible about who you’re designing your product for. As a bonus, you’ll wow your audience while also improving your strategic planning skills.
When discussing your target market, if at all possible, attempt to create a user persona or a profile of your ideal client. This may aid investors in visualising your target market and shows that you’ve given careful consideration to who your company will service. Fast pitches work better when directed at a specific person rather than an entire demographic.
6) Your revenue stream or business plan
This is the slide that has the greatest impact on investors. What are your financial plans? Be as precise as possible with your goods and prices, and be sure to stress how eager your target market is to see you.
7) Your accomplishments so far: initial traction and key dates
You want to establish credibility as soon as possible in the presentation. Spend some time showcasing the success you’ve had.
This is your chance to promote yourself. Astound the investors by showcasing your team’s achievements to this point! Even if you may have discussed tidbits of this before, now is the time to take a comprehensive look at your company.
But don’t stop there; talk about your future goals as well. Take the time to lay up an action plan with specific next actions and goals, as well as how the money will help you get there.
8) Marketing and sales strategies for getting new customers
This part of the investor pitch and the company strategy is often omitted. What methods do you plan to use to reach your target audience? What’s the price tag on this? What will you use as a yardstick to determine your level of success?
You should be able to figure out your client acquisition expenses rather quickly if you have good financial records. However, you should also explain how you plan to contact consumers, which platforms you will advertise on, and perhaps provide a sample of message..
After doing your homework and getting to know your target market, it’s time to present your findings to investors.
9) Your group of people – Your team
Investors want to know about your team and why you believe they are the best individuals to run your business.
Also, make sure to mention any skill gaps your team may have. It’s not uncommon for startup teams to be short on critical personnel, such as marketing or managerial experience.
Let them know that you’re well aware of the fact that you’re far from an expert.
11) What you expect your net worth to be
Show your revenue projections for the next three to five years, broken down by product. You must provide your assumptions to back up your statistics.
Investors will use their smartphone calculators to verify the accuracy of your estimates, so provide them with the information they need.
If your financial graph shows growing patterns, such as when things change, provide an explanation. Remember that you must communicate with them as quickly as possible.
Finances may easily consume a lot of time in a meeting. Prepare a lengthier pitch deck that includes all of your financial facts, or be ready to answer questions from investors after you’ve finished your presentation.
12) Identifying and defeating your rivals
This is a very important part of your presentation, and far too many people either ignore it or fail to describe how they differ from their competitors.
With your competitors listed on the left-hand side of the page and a list of your features and benefits at the top of the page, with checkmarks next to which businesses offer each service in a competitive matrix format, this slide should be presented in a competitive matrix manner.
A competitive advantage may be shown by having checkmarks at the top of every category but being deficient in critical areas where your competitors are strong.
13) Your financial needs and requirements
Include how much money has already been put into your company, who owns it, and what percentage of the company you own (and be clear about what level that is).
How many rounds of funding are you likely to need?
Which kind of funding are you looking for?
Is it a convertible note, an equity round, or some other kind of financing that you seek?
Focus on why your management team is qualified to handle their increasing investment.
A potential investor will want to know why you need the capital, what you intend to do with it, and how you anticipate it will benefit your company.
14) Your method of leaving the situation
Your plan of action when you want to stop
If you’re seeking for large sums of investment money (above $1M), most investors will want to learn about your exit strategy. Is a sale or IPO in your future, or are you considering anything else?
Your research on the exit strategy should show that you’ve done your research and that it makes sense in three, five, or ten years.
15) Observation and follow-up
In order to attract investors, you must be able to prove your claims. You should have an elaborate company plan ready to present with potential investors, so they may learn more if they so want. After all, the goal is to make a compelling presentation such that at the conclusion of it, their hands are outstretched, begging for your executive summary or full business plan.
16) Consider the comments you get and adjust your pitch as necessary.
Always have an open mind, even if your pitch fails miserably. Be receptive to feedback and use it to improve your pitching abilities in the future. If the investor refuses to provide any information, don’t push the issue. By asking for extra time, you’re taking advantage of their generosity. It’s tough to strike the proper balance here.
If at all possible, send a second member of your team to the meeting to take notes and go over the material after the fact. Analyze the presentation for places where you tripped and slides where the investor expressed dissatisfaction. Don’t stop working on your pitch after you’ve discovered the ideal one.
A good pitch can only be judged after it has been delivered. Don’t overthink things, and look at every investor presentation as an opportunity to grow both personally and professionally. In the future, you’ll be able to use what you’ve learned in other areas of your company.
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