Raising capital to kick-start a business is one of the most daunting tasks for most prospective entrepreneurs. Though in some of my previous articles I’ve discussed wide-ranging ways in which you can raise capital, getting investors is still an option. I would, however, underscore that seeking the hand of investors should be done when you know your business idea is potent. Though getting an audience with a potential investor can be a milestone, it isn’t necessarily a ticket to getting the investment. There are key principles you must be abreast with in order to make an irresistible pitch once the opportunity presents itself.
Keep It Short And Sweet
Most prospective investors don’t usually have a lot of time on their hands. Oft time there are numerous other people seeking an audience with them just like you. Thus, time is of the essence and must be used wisely. It’s generally stated that a well-constituted pitch should last at most 10 minutes. This entails that your pitch content will have to comprise of only pertinent details and must flow coherently. It’s about being concise and yet powerful at the same time; don’t speak hurriedly though, have a steady pace. Suppose you’re told at the onset that you have a certain number of minutes to pitch, finish early with some minutes to spare. What all this connotes is that you must rigorously prepare and rehearse your pitch. This also calls upon you to anticipate possible questions and how you would answer them.
If you want to put across any piece of information to anyone in any field, story-telling is a timeless classic. Even when I talk about content propagation I’ve always underscored the potency of story-telling. It engages your audience, makes them relate emotionally and helps etch what you’re saying into their memories. So when you are pitching, particularly when you’re narrating how you conceived the business idea, tell a story. Encapsulate your business discovery journey into a gripping story.
Know Your Brand
Any business idea revolves around the concept of products or services that’ll be offered to generate revenue. You must display unquestionable knowledge of your brand. This will also indirectly show whether or not you’re passionate about it. It’ll also display whether or not you’re a chancer who just wants to get capital but without in-depth knowledge of their products or services. So make no mistake here; prove that you know your brand intimately.
One of the elementary indicators of how a business will fare is its value proposition. In principle, the value proposition must be unique. You must be able to show how your products or services will come with a unique value proposition. A unique value proposition is responsible for ensuring significant customer inflows, the fostering of brand loyalty and your transcendence over competitors. If this can’t be shown from your pitch then any potential investors will be very sceptical. Essentially investors want a proven prior guarantee of ROI so that they make good on their investment.
A business idea that can’t lure customers is as good as dead. Your target market is very central to customer inflows and subsequently revenue generation. Niching is very important in any business venture because it denotes your brand identity. So you must do your homework to know how you’re going to niche. This will prove to investors that you have done your market research thoroughly.
Knowing your target market isn’t enough, how are you going to lure them or reach to them? That’s where your marketing strategy comes in. You comprehensively expound on how you shall conduct your marketing campaigns. Instead of just explaining your approaches here, you must go a step further to provide your market segmentation in figures. This will show investors that you’re attuned to what your market will be like and how you’ll engage with it.
Numbers Numbers Numbers
This is the most important aspect for most investors – the financials. You can scale through all the other parts of your pitch without much grilling. The financials speak the most about how realistically lucrative your business idea will be. Your financial projections must be detailed, accurate and honest. If you lie your way through this part it’ll catch up with you later, supposing you do get the investment. Most people, due to laziness, aren’t diligent enough to come up with empirical financials – rather they cook up figures. Most investors have been dealing with entrepreneurs for a long time and they can easily spot fake financials – so never take your chances here.
With these 7 keys, you rest assured you’ll make a striking pitch. Your pitch can be so good that the investors literally begin to pitch to you to work with them. Let me also point this out, some investors might need to know your exit strategy. For instance, they might want to know what you will do with the business, say 10 years from now. By exit strategy, I’m referring to whether or not you’ll sell the business, do acquisitions and so on. Just be prepared for such questions. Basically, you’ll just need to have a long term perspective of where you would envision the business to be years from now.