If you’re trying to get investment, it’s important to be pitch-perfect.
Although your business plan forms the sturdy backbone of your company, your investment pitch has an equally vital role.
It’s your game-face, your chance to shine, and it should be dressed to impress.
However, that’s not to say your business pitch should be all style and no substance. It should be a winning combination of market research, industry experience, number crunching and astute business acumen – all tied up in one ultra-appealing package.
If this sounds virtually impossible to achieve, don’t worry. It’s actually not as complicated as it sounds, providing you’re willing to put in some effort to get your pitch just right.
Mastering the Art of Pitching for Investment
Your pitch is your big opportunity to sell your business concept. It’s a chance to highlight just why your idea is viable, and why it deserves a substantial cash injection to get it started.
But remember, it’s not all about you. You’ll need to show your investors that there’s plenty of profit in it for them too, otherwise you’ll be swiftly shown the door.
Here’s how to make sure you get it right when you’re pitching for investment.
The Most Effective Ways to Secure Investment
1. Keep it clear, concise and factual. Investors want to hear business ideas that excite them. They’re actively looking for the next ‘big thing’ that can send their profits soaring. However, they don’t want to listen to pitches that are all hot air and no real substance.
As a result, it’s advisable to keep to the facts. Don’t make overblown statements that you can’t back up with evidence or numbers. Avoid bragging or sweeping generalisations. Keep your pitch continually fine-tuned towards the ‘real picture’, and if in doubt, remember that less is often more. Needless waffle and pointless boasting is unlikely to secure your investment.
2. Keep it realistic. If you’re planning to ask your investors for £1 million to set up your business, a word of warning. You’re unlikely to get it, particularly if this is your first company. Remember that your business doesn’t need to go global in a fortnight. It can be built up gradually, and there’s no problem with that. If you can show your investors that there is real room for growth, you’re more likely to receive a realistic investment sum.
3. Show that you’re committed. Always remember that you’re essentially asking an investor to take on a risk. After all, there’s no guarantee your business will succeed, and if it doesn’t, they’ve effectively lost their cash. It’s a good idea to show them that you’re committed to making it work by putting your money where your mouth is. Invest finances of your own (if you have them available) and put in the time and effort to show that you’re dedicated to making this work.
4. Recognise their expertise. Bear in mind that your investors are highly experienced. They’ve been in the business for years, which is why they’re now able to invest in and support others. Whilst it may sting a bit to hear them criticising any aspect of your business, you need to accept that in this instance, they may know more about the industry than you do. Arguing with them until blue in the face isn’t the wisest way to proceed.
5. Don’t bore with numbers. Throwing in a few important figures into your pitch is sensible, as it shows you know what you’re talking about. However, don’t bamboozle investors with number after number, unless you want to send them to sleep by the time you’ve finished talking.
Remember, they are interested in the raw statistics and figures, but they’re also there to be inspired by your business concept. It’s just as important to keep them interested as it is to prove your knowledge.
6. Don’t pitch without experience. If you’ve got an excellent business idea, it’s tempting to try to find funding straight away, in order to get started with it. However, most investors like to see evidence of proven success before investing.
This doesn’t necessarily have to be in the form of regular cash flow and sales (though they certainly help, especially if you can show evidence that your business has grown). It might be that you have considerable experience in a related industry, which would help build faith in your ability to make the business a success.
If possible, try to find ways of building your business before seeking major investment, even if it is on a basic budget. Even selling products on a market stall proves that your products have appeal!
7. Know your market. It’s not enough to have a vague idea of who your business is aimed at. You’ll need to know exactly who will buy your products and services, how much available market share there is, and how much of that share you can realistically expect to gain over the next few years.
Never make the mistake of thinking that your customers will like your products just because you do. Before you book an audience with an investor, take your product to a relevant focus group and get feedback. Hire a market research company to find out the exact level of demand for your services. Don’t pitch without arming yourself with the relevant market evidence to back up your idea.
8. Practice makes perfect. Essentially, your pitch is a performance. Remember that this meeting marks a pivotal moment for your business. Secure that investment, and it could send your company into the stratosphere. In short – make sure that this pitch is the performance of your life.
Polish your pitch by practicing it frequently before the big day. Ask friends and family to watch it and provide honest feedback. Look for tips online to help you master the art of delivering a convincing, inspiring pitch. Do whatever you can to ensure that your presentation wows your audience.
9. Visual presentation. A pitch doesn’t have to be all about the words. Feel free to use visuals to back-up your content. In fact, it’s advisable that you have some sort of visual content, even if it is just a simple hand-out. About 65 per cent of the population are visual learners, so there’s a significant chance your investor will be too.
10. Come prepared. It goes without saying that you’ll need to take a carefully written business plan with you. However, you’ll also need to create an easy-to-read summary, detailing the key points of your idea. If you’re using PowerPoint to display visuals, make sure it’s uploaded properly on your USB stick, to avoid embarrassment on the day. Even better, have a Plan B in case the technology lets you down!
Pitching to Investors – Where to Start?
Thanks to the growing popularity of P2P and equity investment, there are a number of places you can seek out investors for your business.
One of the most effective ways is to book a ticket to the Business Funding Show, held at Old Billingsgate on the 2nd and 3rd February, 2016.
It’s a great chance to hear some of the biggest names in finance and investment share their tips and techniques, and there’s also the opportunity to pitch for financing while you’re there.