Planning your pitch
Perhaps the most challenging aspect of being an entrepreneur is working out how to pitch your startup idea to investors. Investors tend not to be patient and tolerant with entrepreneurs pitching an idea to them if the pitch doesn’t stand up to scrutiny. Investors are busy people generally, and they see an entrepreneur whose startup pitch is of no interest or value to them, as an opportunity to vent. Here are some helpful tips that will help you pitch your idea, without becoming the target of an investor’s wrath.
Why your business
Be aware that the investor probably has other entrepreneurs who are also pitching ideas to them. You need to very quickly come up with an explanation as to why the investors should choose to invest in your start-up business and not the others. Your intention will be to make investors feel like they would want to hear more about your business and develop an interest in investing in it. The information you give should be full of benefits that your investors will get by putting their cash into your business.
You have the solution
Your first statement should capture the attention of the investors. You should answer ‘what is the problem’ with ‘what is the solution.’ After you have made this clear, the investors should feel more comfortable and interested in the rest of the information in your pitch and understand precisely what your business and its product or services will do.
Investors might interrupt you, so be ready for questions as you go through the presentation. However, they might remain silent and go through a Q&A session at the end, but it’s always best to be ready for questions at any time. Being interrupted, unless they tell you to stop, doesn’t mean they’re not interested in whatever you are going to tell them. It’s likely it means the opposite.
It’s all about timing
During the introductory statement, state briefly what your enterprise deals with. Then it’s important you tell the investors the key messages in the shortest time possible in your pitch. Be aware of how much time you have been given to pitch your idea. If your pitch takes 20 minutes and the investors are only willing to give you 15 minutes, you’ll need to mentally cut out some information so that they hear what is essential. There is nothing worse than being told to stop when you haven’t got to how much capital you need or emphasizing how great your product is. A good rule of thumb is to have two pitches ready to go and practice both: one that’s 30 minutes and one that runs for 10 minutes.
Investors always want to work with people they feel they’ll get along with and with whom they can work productively. Give a short introduction of people in your team. If there are many, mention your colleagues you think will impress the investors the most. Talk about the successes they’ve had and explain briefly how the goals were achieved. Mention the highest qualifications they have attained and the experiences they have from their previous work. Then, with confidence, convince the investors that you have the team they need to achieve the results they desire.
Talk about the customers that your business is targeting. Explain briefly what the customers expect and focus on how your business is different from others when it comes to customer satisfaction. You can also describe the flaws regarding your competition and how you will deal with competition. Give a few examples of how customers have benefited or will benefit from your good and excellent services.
Convince the investors that indeed there is more demand out there for your products and services. At this point, you can also explain to your investors how you’ve managed to advertise or how you will be marketing your products. Every new start-up business must have a target market for its goods or services.
Explain to the investors the unexploited market that your company is targeting. Be specific about which customers will be purchasing your services. Let the investors know the size of the market, how many potential customers there are and what are their locations. Explain what advantages you have over other entrepreneurs that will best assist you in serving the targeted customers.
Talk about how innovative your business will be, so as to maintain its monopoly in the targeted market. Investors will want to invest in a business entity that ensures the retention of customers.
Investors will want to know why you chose that particular type of business. Tell them how you got the funds to start your business and how you’ve attained more resources for your business. Convince them you will always have access to money, hopefully, from the profits your business will generate. You need to be able to show that your company is expanding and your goals for the next five years are realizable. It is beneficial for you to mention the name of a big firm or firms you intend to work with in the future. Finish it on a positive note. Your last words will be filling the silence that follows your presentation.