As a startup, bringing a fresh perspective is a sure way to get your business noticed. However, convincing a potential investor to write you a check will take more than a good idea.
You must master your investor pitch in order to get the attention of people who can ultimately open their wallets and help accelerate your business.
Over the years, investors have listened to thousands and thousands of pitches, the following themes define a great investor pitch strategy.
Sales validate your business model
Sales is the best form of capital as they validate your demand and value production claims.
If you have a notable client paying for your product whether as a pilot or in beta, it will help attract other customers.
It informs investors of the presence of market demand. Projections are just indicators of what could be, however, they are important because investors are interested in seeing the upside potential.
Hence, having and presenting hard sales data showing increasing demand is key.
Explain who and how you will reach your audience
If you cannot describe your target audience and how you plan to reach them, then you have not done sufficient marketing research.
A marketing plan and strategy is crucial in sales otherwise it would be an indication that you have not identified realistic ways to reach out to potential customers or that no one is interested in what you’re selling and that’s an even more problematic pitch.
Know your numbers and return on investment
Having a clear business model is how you get investors in what you’re saying because it shows them that you understand the finances of your businesses.
More than creating a financial structure it is important to be able to articulate it. Investors need to understand how your business will make money, the timeframe and how much return they will get on their money before releasing funds to you.
Show that you are invested in your business
Investors want to see that you have invested not just time, but money in your business. It shows you also have something to lose if things do not turn out well.
Investors like to see that you are fully committed to your business. While it may make financial and personal sense to keep your day job while you work on your business part-time, investors want to see or at least get the idea that you are dedicating time to make your business a success.
Anticipate challenging feedback
No matter how well put together an investor pitch is, unanswered questions or gaps will exist. Investors will test your knowledge and ability to stay composed under duress by raising potential issues.
The most successful pitches are the ones in which the entrepreneur has anticipated questions and has answers for them.
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