Even when you know all of the ins and outs of your business, the idea of sitting across from an investor and giving a business pitch can be daunting for an entrepreneur. The last thing you want to do is come across as a novice who hasn’t done the needed prep work, potentially jeopardizing a deal. You can avoid this by anticipating what investors want to know and including this in an enticing business pitch.
It’s all about capturing interest. Think of the investment pitch as the trailer to a film. It needs to be appealing enough to pique the interest of the audience, making them want to see and learn about a business. The more exciting the pitch, the greater the interest is likely to be.
From the start, the business pitch must grab the potential investor's attention, perhaps honing in on how the product solves a problem and how consumers find this irresistible. You want to make the most of these first few moments of your pitch.
Just giving your name and title won't cut it. You need to find a way to captivate the investor's interest right away. What you need is a mini-summary, a snapshot of where the company is now.
In about 60 seconds potential investors should learn the company's vitals. The pitch should include the essentials of the business, such as whether it's a startup, how long it has been running, where it is in terms of product development and whether the owners have raised any money so far.
Spend time on your colleagues and partners
Also, it's important to know all about the experience of your team and to be prepared to talk about this. Especially with a newer company, investors will be very intent on learning about the team – the driving force behind the company. This is your chance to emphasize the experience, talent and passion you and your colleagues or business partners bring to the table.
Don't get too technical
While you should be ready to recite all the details of your product, don't fall into the trap of focusing too much on the inner workings of technology itself. Instead, highlight the benefits to the user. It's important to bring along examples showing customers using the product and explaining how this can help them. Build on your investment pitch by showing videos or photos of your product in use.
Know your numbers
You should also be able to dig into the details of the market your company is targeting, and you should practice fielding questions. This means knowing just how big the market is you’re addressing and how likely this is to translate into profit.
Also, it means being able to answer questions about the financial forecast for the next three years. Be transparent about what you'll be putting their investment towards, when you expect to break even and when the company will be profitable. At the end of the day, investors want to know what their return on investment will be – and when.
What differentiates you?
Finally, make sure you’re prepared to tell investors why they should invest in you – what makes you stand out. Fill this with ideas of what makes your business compelling, whether it be an innovative product, a great team with strong motivation, an untapped market, or something else.
Come primed with this information and you should leave with the backing of a zealous investor. For more information and tips for your small business, visit our Small Business resources page.