Entrepreneurship requires knowledge of how to pitch your business, especially when you seek investors. However, it is not the only point: having a solid pitch shows that you know your business inside out. Here are 5+1 tips for you to pitch successfully and create your first impression strongly.
1. Know who you pitch to. Getting in front of every investor is not an effective way. Investment isn’t only about money. It also aims to create a long-term partnership. So, researching potential investors is a better idea. Make sure that you find answers to the following questions before starting your research:
What industries do they invest in? Make sure that the investor’s interest areas match your field.
In which stages of your business do they invest? Mind to be on the same page with the investor you want to attract to your business.
What’s the investor’s track record? Dig deeper into investors’ experience and investment history.
2. You aren’t only presenting your idea, but also yourself. As mentioned above, investment isn’t only about financials, it’s also about building connections. Thus, investors want to work with the right people. According to Jennifer Fonstad, co-founder of Aspect Ventures, investors want to know whether the founders have worked together before, if your startup’s early hires have complementary skill sets and whether you’ll be flexible, open-minded, and willing to embrace different perspectives.
3. Outline a problem with a story. Begin to pitch with a story and make sure that you’re addressing the problem in the marketplace. It’s even better if you refer to the audience, in your case to investors. Additionally, demonstrating realistic forecasts adds bonus points to the success of your pitching.
4. Offer a solution. Now it’s time to focus on your product! Many pitches fail because they present too many business ideas and lack offering a solution. Investors are likely thinking about how they will profit from investing in your product and that's what you want to focus on to get them to invest with you.
5. Discuss your strategy. Investors will not support the idea which does not match consumer needs. Focus on your marketing and sales strategies in this part, discuss your target market and how you are going to get to them. Add your business traction and financials in order to make the image clearer: share how you see the progress of your startup and how much investment you need. Investors will care about your business model in order to see the insights about your revenue. Also, recent research shows that investors want to see exit strategies because they might want to know the ways of converting their investment back into cash. The most common exit strategies include:
Acquisition – when a company buys the shares of another company in order to gain control
Merger – when two existing companies unite and turn into a one company
Initial Public Offering (IPO) - When a private company issues its first sale of stocks to the public and can start raising capital from public investors
Bonus tip: Always be open to feedback. No matter the outcome of your pitch, look for areas to improve. Don’t be afraid to ask for feedback and take that into account for the next time you pitch. And don’t push the issue when an investor isn’t willing to invest in your business.