There are several reasons why you may be looking for investors to fund your small business. You may not be able to obtain a bank loan and need the seed capital to start your venture. Your business may be in full operation yet you need working capital to purchase equipment, pay employees or rent a larger storefront to expand your business.
Whatever reasons you may have, you will have to put on an impressive funding pitch to entice investors to part with their money and place it into your capable business hands. Investors will look for the following aspects about your business:
- You understand market demand for your products or services.
- You run a cohesive team that is capable of the things you can promise.
- You’ve gathered the facts about finances and future revenue projections.
- You’ve outlined what the funding will be used toward, and what the return of investment will be.
How to perfect your funding pitch
You’ve gathered the hard facts and the investors are sitting at the table. Now is the time to put the best spotlight on your business. Here are several tips to putting on the best funding pitch so that you can have a successful meeting.
Create a comprehensive pitch deck
A pitch deck involves using documents and slide presentations that breaks down everything about your company that you want to discuss with the investors. It will talk about your vision, market analysis, customer demand, products and services, growth strategy, funding proposal, and other business elements. This pitch deck will allow investors to see the facts for themselves and ask pertinent questions to gain more clarity.
Don’t get bogged down in just the facts
You want to engage the investors, not bore them with the hard numbers throughout the entire pitch session. Introduce your business and your vision in an interesting way and with a story that makes the investors sit up and lean forward in their chairs in excitement and anticipation. Be charismatic yet professional, holding a tone of likability that makes investors want to say, “Let’s jump on this opportunity before someone else does.”
Show your market knowledge
After you’ve introduced yourself, your business and your vision, you can let the facts back up your words. You need to illustrate that you have done your homework and have factual findings about your market plan, customer demographic, sales potential and competition. When investors see that you understand your market segment, you can build trust that you will make the sales needed to bring in revenue.
Provide details about financial projections and funding requirements
Ultimately, the biggest questions investors will have are how you plan to bring in profits, how will you control operational costs, and how you will use the investor funding. Creating a revenue model while providing profit-and-loss statements will allow you to show expenses and sales of your products and services. Don’t forget to not only show you present revenue and expense models, you should also show financial projections for the next three to five years. While investors know that these numbers could change, especially if you are a new business working in a niche market, it gives them an idea on what to expect from a financial angle.
Prepare your pitch to find the perfect investor
Your funding pitch will be one of the most important presentations that you can put on to achieve your business dreams. Proper planning, record keeping and presentation materials are vital to show investors that you are serious in achieving your business dreams for the long haul. By perfecting your pitch, you help investors further understand your business and funding needs.
Practice your pitch
So much hard work can come undone for want of more practice. Think about it. Pitching is the art of convincing investors, more often than not they are complete strangers, so you have little time, to build trust in you and your proposition. The better you pitch the better chance you have of moving to the next stage.