Benjamin Franklin said, “By failing to prepare, you are preparing to fail.” Those words are just as true today as they were when he said them. When your business is poised on the brink of scaling up, when you absolutely need money to take your company to the next level, you're going to have to go out and raise some money from investors.
But you can't just make an appointment and wing it. Prepare yourself to succeed!
How to Prepare for an Investor Pitch
1. Be clear about how much money you need and what you'll use it for. The surest way to fail in a pitch is to throw an open-ended ask on the table and wait for your prospect to write you a fat check. If you can't be bothered to specify the exact amount of money you need and articulate specifically what you'll do with it, you have no shot. And you can't just say you're going to step up marketing or some other vague plan. If you find yourself unable to be specific about how much money you need and how you'll use those funds, then you're not ready to pitch yet. You still have homework to do.
2. Know your target. In most cases, your prospects will fall into one of four investor categories, and you'll need to adapt your pitch to address each category's concerns.
- Acquirer. Folks who want access to your tech, your people, or your market share see your company as a means to an end. Your pitch should highlight what investing in your business can do for their business.
- Venture capitalists. They're all about the $$$. Be precise in your figures and focus on return on investment.
- Angel investors. You can sometimes use a softer touch with your angels, focusing on their philanthropy or the critical community needs your organization fills.
- Family and friends. While ROI may matter to the folks with whom you have a personal relationship, you can play up the emotional connection with these investors.
3. Demonstrate that you're a strategic investment. I don't know about you, but I don't know anyone who's just throwing money away. We all want something in return. We want to see our money grow. By focusing on your unique position in the marketplace and by demonstrating that you can grow your investor's money, you're upping your chances for success.
4. Be tenacious. You're going to be turned down. It's as simple as that. But if you don't learn to keep going, keep seeking out new prospects and new opportunities, then you're never going to raise the funds you need. One caveat here: if you're being turned down by everyone, every time, then you may want to step back and take a look at what you're offering. Not every investment is a good one, and if you're genuinely unable to gain any traction at all, you may need to reevaluate your plans. Make sure what you're offering is sound.
Though selling ourselves and our companies isn't every entrepreneurs favorite task, it is a critical one. Your success will come more easily and more quickly if you take the time to ensure you've prepared properly. Taking a sound plan to market with a clear strategy is your best bet for success.
Republished by permission. Original here.
Chien Ming Wang Photo via Shutterstock
This article, "How to Get Ready to Make Your Pitch to Investors" was first published on Small Business Trends
No comments:
Post a Comment