Even though many entrepreneurs come up with excellent ideas for products and services, a large number of businesses do not succeed. According to an analysis of business failures in Entrepreneur.com, as many as 29% of startups, stumbled due to lack of cash. This makes the ability to pitch successfully for funds from investors critical for entrepreneurs. Some awesome tips:
Don’t Pitch, Instead Tell a Story
Hard-nosed investors are accustomed to hearing pitches of every kind and tend to be very difficult to impress. Instead of making a pitch for funds, you should instead try to tell them a story to grab their attention. Investors will get all the vital information in a way that no spreadsheet ever can tell. Remember, even investors who believe in nothing but data are not immune to a well-told story of how a business can make a real change to the lives of its customers and make money for them.
Choose the Right Investor
If you have a good business idea that requires funding, you need to focus on investors who are most likely to be interested. Most investors like to fund certain types of businesses as they understand those market dynamics better. It can be a complete waste of time trying to pitch a business to an investor who does not have a track record of funding ventures in that space, warns EJ Dalius. Instead, you should try to identify angel investors who specialize in the sector your business is in and then craft your pitch to appeal to them. Engaging with the right kind of investors also allows you the opportunity of being mentored by experts.
Keep the Pitch Simple but Impactful, Recommends Eric Dalius
Making the business look complicated can turn off investors. You should focus on making the presentation simple so that investors can quickly understand your business idea, your growth potential, and an estimate of the funds required at different intervals to make the venture a success. Remember, you have a maximum of 10 minutes to get a nod from the investors so you need to keep the presentation simple, crisp, and to the point.
Investors will pump in money into your venture, not because they like you but only because they can profit by your success. This means that it is very important for you to demonstrate how good your business model is by projecting the revenues and expected profits from the perspective of strict timelines. The purpose of this is to tell your investors the kind of returns they can get on their investment in the medium and long-term. Keep in mind that early investors will be with you for a maximum of three to five years only so your ROI projections should focus on that timeline.
More than anything else, investors will try to find out how passionate you are about making your business successful and whether you have it in you to stay the course to make your venture successful despite all odds. All investors try to minimize their risk so you will need to go all out to show them how committed you are personally to the business.