Is obtaining capital for a new business venture easy? Nothing of the sort, but there are various ways and means by which you could make life much easier or considerably harder for yourself. Armed with a fantastic idea and the commitment required to bring it to life, the only thing that really stands in your way of making it happen is your pitch to investors.
In terms of getting it right, time and experience have taught us that it essentially boils down to four simple rules. Work in accordance with the following and you may just find that your chances of securing the capital you need take an important step in the right direction:
First of all, there is really nothing to gain by wasting time on the kinds of investors that are in no way suitable for your business. Any source of capital doesn’t necessarily represent the right source of capital – an important point to remember. Instead, you should be looking for an investor with relevant experience and a strong interest in the industry relevant to your business idea. You may also want to consider their networks and business connections, how their current position could help your business long-term and whether or not they share your vision and passion.
It will be necessary to (quite literally) lay your cards on the table and demonstrate your prospective investors just how solid your vision, plans and projections really are. And you’ll need to do all of this in no more than a few minutes, so you’ll need to condense everything down and use plenty of visuals, charts and so on. This is where you will show your prospective investors the problem you have identified, the solution you have come up with, where it fits into the current market, how well you have researched your target audience, how you expect your business to perform long-term and so on. This is also where you will most likely find yourself challenged with a non-stop barrage of questions, so be ready to clarify each and every point you bring up.
Your own personality and your chemistry with the investor will make an enormous difference with regard to whether or not your pitch is successful. They may love your idea, but if for whatever reason they do not believe in you (or simply do not like you) it’s pretty much game over. You aren’t necessarily looking to become their best friend, but remaining personable and pleasant at all times could not be of greater importance. In addition, they are mostly interested in the upside of the proposal – as in what they can expect to get out of the deal. As such, focus on satisfying their cravings for solid returns, minimal risks and absolute confidence on your part.
Last up, be sure to follow up on each and every pitch as soon as possible after the meeting itself. Without crossing the line into a desperation or pushiness, this is the perfect opportunity to once again drive home the key points of your pitch, while at the same time including any updates or additions or relevance and importance. Continually modifying and refining your pitch is of crucial importance – especially when done so on the back of constructive criticism, feedback and lessons learned during failed attempts. Realistically, every pitch you present should be more effective and persuasive than the last.