We are living at a time where startups are playing a crucial role in every country, they are turning into industrial giants that are taking the name of their country further and boosting their economy as well. Now, for any business start-up, the most crucial step is to organize funds so that they can take the business forward.
Arranging for funds, however, can become a nightmare for many entrepreneurs. Being an extremely important part of establishing a successful business, even minor mistakes made, while presenting your idea can lead to the loss of prospective investors and hence hinder the path towards the foundation of a successful business.
This list here comes to your rescue, by putting down mistakes to avoid during pitching. In this article, we will explore some vital points that will help you during the pitching of your business to investors.
1. Know Your Investor
2. Work on Your Pitch
3. Focus On Your Presentation
4. Present Your Business Plan
5. Increase Your Investor’s Interest
6. Make Your Proposal Unique
7. Be Humble
8. Avoid Exaggerating
9. Do Not Show Desperation
10. Do Not Be Overconfident
1. Know Your Investor
If you want someone to invest in your startup the first step is to get to know them well. Do your research before approaching the person or organization. Some mistakes to avoid during pitching to investors for your business. There is no need to get personally close all you need is the small official details about their area of work so that you can use it to your advantage while pitching.
Make a note of the different ideas that they have invested in earlier to find out what type of work they prefer to invest in. If you ask a person operating food chains to invest in a software business there are huge chances of you being rejected, so knowing your investment is extremely critical.
2. Work on Your Pitch
A chance to pitch can come up anywhere, a party, elevator, or on public transport. However, in these situations, there isn’t enough time at hand so reduce the length of your pitch. Ideally, try keeping it a minute or two long.
Most people start losing interest after a minute, hence, make the pitch small and effectively highlight all the attractive and remarkable points so that the investor is intrigued in doing business.
3. Focus On Your Presentation
Usually, start-up organizations end up putting all their points and ideas into a presentation hoping that the investor will be impressed, but a presentation filled with too many words will cause more harm than good.
When presenting, keep in mind that your slides only have a gist of the plan of action. It should be short, crisp, and to the point like your pitch. Try to wrap up your presentation in 12 to 15 minutes. Generally, you will get only half an hour with the potential investor including the time for Q&A, therefore, use the time wisely.
4. Present Your Business Plan
The pitch and presentation won’t be of any use if the business plan is not thoroughly laid out. If the business strategy does not highlight the goals of the start-up along with the expected revenue, size of the target market, and description of the start-up management team, the investors will not be convinced. The important point is to make them realize how strong the business is.
5. Increase Your Investor’s Interest
Every person wants to start a new company to provide people with better facilities and give them something but that’s not how an investor would think. An investor will only agree to fund a business if he is sure of gaining a profit; hence, you need to make sure that you mention your expected monetary gains for the next few years.
6. Make Your Proposal Unique
Sending your proposal to every potential investor through email in the hope of getting a response will not yield any results because investors are swarmed with thousands of proposal mails every day, so the chances of getting a call are very slim. You need to find unique ways of making your proposal stand out so that it can invest your potential investors.
7. Be Humble
When you land an interview, with a potential investor, be humble. Let them ask questions. If any flaws are pointed out in your model or plan, accept them and find ways to improve them. The investors have seen their fair share of business proposals and the advice they give will be beneficial.
Do not be stubborn and keep an open mind while answering. The reason an investor ask questions is that they are interested and wants to make sure that they are putting money in the right place.
8. Avoid Exaggerating
Exaggerating financial gains and lying about them is going to get the proposal rejected instantly. The investor will want to know exactly where and how much money is being spent. If you get caught while lying, it could make a big opportunity slip through your fingers.
9. Do Not Show Desperation
The funds are extremely important for the survival of the business. There might be an urgent need for the funds but showing that desperation to the investor would be a wrong call. Confidence is crucial and you must possess that regarding your business idea as it is very crucial.
10. Do Not Be Overconfident
Even though being confident is good, being over-confident and bragging about the growth and profits of the business will drive the investor away. This will give them the impression that you are not realistic and will get you rejected. Try to be subtle while approaching potential investors.
Conclusion
It’s always challenging to pitch your ideas to Investors as an entrepreneur. Focus on numbers while presenting your story in front of investors. Don’t forget to share the marketing plan. Otherwise, practice your pitch and dress well. Prepare yourself for your next pitch, while keeping the above points in mind.
FAQs
How do we find investors for business?
Look for relatives and friends who are interested in your business, private investors are also there to choose from, crowdfunding platforms can also be used to find investors.
Can we pitch an idea to the company?
Yes, an idea can be pitched to the company but with the proper showcase that fulfills the criteria of that exclusive firm.
How can we convince the investor?
Investors can be convinced in many ways, some of the most common techniques to follow are to have a clear business plan with proper knowledge about its type of audiences, market conditions, and competitors. One also goes ahead with the convincing part by asking for the guide from the investor itself.
How to approach an investor?
Approaching an investor seems bigger task than actually dealing with an investor. One can always take the help of any intermediate party available, or the best approach for an investor is to go with the means of asking for a guide rather than directly coming up with the investing part.
