When seeking financing for your start-up through borrowing, it is crucial to convince potential funders that your business is a compelling investment opportunity. This requires thorough preparation and a persuasive approach. While it’s important to convey enthusiasm, it’s equally essential to maintain honesty and realism in your pitch.
Preparing to pitch
Once you have identified potential investors, your next step is to create a persuasive presentation, commonly known as a pitch deck, to secure their investment in your business.
To begin, conduct thorough research on your potential investors. Understand their interests and current investments, and determine if they align with your venture’s plans. It is essential to be well-versed in every aspect of your business, including competitor analysis and market research findings.
Furthermore, it is crucial to demonstrate a detailed understanding of your finances. Provide comprehensive financial projections that encompass short-term, mid-term, and long-term forecasts of turnover and profits. This will showcase your financial acumen and instill confidence in your investors.
When starting your pitch, captivate your audience with a short and engaging summary that highlights what makes this opportunity unique and enticing for investors. Clearly define your business’ value propositions (USPs) and articulate the problem your business solves for your target customers.
To structure your pitch effectively, follow this order while incorporating plenty of visuals, product demonstrations, and graphics:
- Outline the marketplace, including information about competition and your target customers.
- Provide a comprehensive overview of your business model and its operations.
- Present a financial overview, including a cash flow forecast, breakeven analysis, and income statements.
- Introduce key individuals involved in the business and highlight their relevant experience.
- Conclude your pitch by clearly stating your financial ask, including the amount of capital your business needs and a detailed plan for how the funds will be utilized and why they are essential for your business's growth.
Online presentations
Pitching through video conference platforms like Google Meet or Zoom has become increasingly common. However, it presents unique challenges that require special attention.
Practice your pitch using the platform’s various functions and anticipate potential technical issues, such as connectivity problems. Keep in mind that you cannot control your audience’s environment, which may be filled with distractions. Therefore, it is essential to get to the point quickly and maintain their engagement throughout.
Since reading a room is more challenging in virtual settings, make your pitch more discussion-based by actively asking questions and engaging with potential investors. Furthermore, it is crucial to avoid talking over or interrupting your investors while they are speaking or asking questions. Encourage them to share their thoughts and engage in conversation as much as possible.
Presenting the pitch
Remember that investors will form their judgment about your business, at least in part, based on their impression of you as the presenter. Therefore, it is vital to convey confidence and professionalism while remaining open-minded and receptive to feedback.
To establish a connection with your audience, introduce yourself clearly, maintain eye contact, and deliver a compelling opening statement about why your business exists and why customers will choose to buy your products or use your services.
Throughout your pitch, closely observe your audience’s engagement levels. Take note of points that raise particular interest as they may resurface during the question-and-answer session.
By optimizing your presentation’s grammar, sentence structure, and readability, you can effectively communicate your ideas, enhance understanding, and make a lasting impression on potential investors.
Need to knows...
By addressing these critical aspects, you can enhance the appeal of your business to potential investors and increase their confidence in the investment opportunity you present.
What does the business offer?
For your business to be attractive to investors, it must offer a viable product or service that solves a problem significant enough to generate sufficient returns on their investment. Clearly articulate the value proposition of your offering and how it addresses a pressing need or pain point in the market.
Who will buy?
To convince investors, you need to demonstrate that there is a substantial demand for your product or service. Show that you have conducted thorough market research and have a deep understanding of your target customers. Provide evidence of market size, growth potential, and your ability to capture a significant share of the market. This will help mitigate the perceived risk and increase the attractiveness of your investment opportunity.
What about the competitors?
To ensure a realistic return on investment for your potential investors, your business must either create a new market or outperform competitors in a significant way. Conduct a thorough analysis of your competitors, their strengths and weaknesses, and identify how your business differentiates itself. Highlight your unique selling points (USPs) and competitive advantages that set you apart. This will demonstrate to investors that you have a solid strategy for capturing market share and staying ahead of the competition.
DO's & DON’Ts of pitching to investors
Do...
- Keep your pitch short and concise. Make your opening summary impactful and captivating.
- Encourage the audience to ask questions and actively listen to their inquiries.
- Support your claims with credible evidence, such as market research, scientific data, environmental impact assessments, and clinical studies.
- Display genuine enthusiasm and belief in your business and ideas. Your passion will inspire and motivate potential investors.
- Maintain a relaxed demeanor with good posture. Effective use of hand gestures can enhance your delivery.
- Speak at a steady pace, especially in the beginning of your pitch, to engage the audience and establish a clear rhythm.
- Utilize powerful images and graphics that complement your pitch and convey your message effectively.
- Incorporate short, professionally made branded videos to engage the audience and demonstrate your marketing capabilities.
Don't...
- Be overly optimistic or unrealistic about your financial projections. Maintain a balance between ambition and realism.
- Overwhelm the audience with excessive technical details and jargon. Keep your language accessible and easy to understand.
- Assume that the audience shares your enthusiasm. It is your responsibility to motivate and persuade them.
- Focus too much on yourself. Instead, emphasize how your business will provide a return on investment for your audience.
- Stumble or hesitate when addressing financial questions. Be well-prepared and confident in discussing financial matters.
- Read directly from a screen or turn your back to the audience. Maintain eye contact and engage with your listeners.
- Fidget during your presentation, as it can be distracting and divert attention away from your pitch.
- Overload visuals with excessive words, bullet points, or complicated graphics. Keep your visuals clear, concise, and visually appealing.
