If you’re an entrepreneur and passionate about what you do, you’ll know how it goes… you have a great business idea, perhaps even one that you have proof of concept for, but now you need funds to take it to the next level.
The problem however, is that when you want someone to give you money, capitalists, investors, friends, family or others… they are trained on finding just about anything that presents a problem, anything that indicates they might lose money, absolutely any risk to success at all. All in all, they are mostly predisposed against you! Very harsh, but absolutely true. While you talk with passion and conviction, they’re looking for reasons your business will fail. Don’t take this personally though, chances are, most of what they hear are sure-fire ways to lose money, so you have to do absolutely everything in your power to convince them that you are offering a sure-fire way to make them money! Over recent years I’ve had to spend a fair amount of time not just consulting on how businesses can cut costs, increase profits and grow, but also on determining how best to pitch to interested investors. One of the most difficult presentations to make as an entrepreneur, is the investment pitch. This article aims to help you through it! Here we go…
1) Sum it up, and quickly! I’ve been there… thinking that all the great stuff that I want people to know about my business can’t possibly be summed up in 30 seconds, but what I realised very quickly is that you don’t have to share absolutely everything. In a short space of time, sharing too much just serves to confuse. Think about the absolute core of what it is that you do, and describe it in a way that describes, shows value, is the most engaging and ‘hooks’ them, leaving them wanting to know more, and wanting to speak to you further. Do this in 30 seconds. Don’t waste time with too much data, background and data.
2) Share very exactly who your customers are. Be very specific and describe this target group very clearly.
3) Explain how you KNOW that your target customers will pay for the product or service you’re offering. Quickly sum up your USP, and any research and proof of concept that you have.
4) Detail your competition, and differentiate yourself. Don’t say you don’t have any! Include those even tangentially associate even if you genuinely feel that you don’t have any.
5) Explain why it’s crucial that YOU make this happen, why it can’t very easily just be done by a person/company who has the money who can pick up the idea, run with it, and achieve market penetration quicker than you can.
6) You believe in your business so get to know every aspect of it… don’t shy away from learning about things that you suspect may make it difficult to succeed, (risks, competitors etc.), as avoidance won’t make them disappear. Best to learn all you can, and determine how you’ll succeed anyway. Trust me, others are going to pose difficult questions, and it’s best to be prepared, so that when the time comes, you can speak with wholehearted belief in your business, confidence and enthusiasm. This, is how you get others to believe in what you’re doing too, and that takes them one step closer to investing in you.
7) Form partnerships that are of strategic benefit and that you can leverage. Try to find businesses and individuals who would be willing to partner with you, creating partnerships that offer you credibility by association and boost confidence in you and your business. If those who are established are willing to partner with you, others, investors included, will feel more comfortable doing the same.
8) Be specific about what you want, whether it’s money, expertise, or something else.
9) Share exactly what any funds you are asking for will be spent on. Make sure that all of it is essential and be prepared to justify the use.
10) Test your pitch. Get feedback, revise and use every pitch presentation as an opportunity to learn for the next one. Write down all the questions, and cover as much as possible in your next presentation to avoid them being asked again.
And that’s about it… go out there, and be confident in your pitch, (but not desperate!). It’s important to come to terms with the fact that not everyone is going to ‘get’ your idea, some may, but might already have committed funds elsewhere, some may not be interested in investing in all industries favouring just one or two that they are familiar with, so even when there is interest, or there is belief in your idea, it might still take you a while to get the funding you need quickly. Recognise that this is all part of the process, and if you’re willing to follow the advice above, and stick with it, you definitely stand a better chance of getting funded than most.