Preparing to Pitch Investors


If you’re in the beginning stages of your business, then you’re likely looking for the proper funding to finance your new venture. One option: raising money from investors. These professionals can help you land the funds you need to get your business up and running.

The result of getting an investor to work with you versus having them wave you off is a matter of proper preparation. First, create an investor database that lists the contacts that may have interest in your business. You’ll be looking for investors that ideally sell similar products, is within close vicinity to your business and who has made high-risk investments in the past. Narrow the list down based on the investors who you’ll likely have a greater success rate with.

When you’re ready to take on one or a team of investors, there are several ways to prepare for your initial meeting with an investor. Learn how:

Create a sharp business plan

One of the most essential steps in preparing to meet your investors is producing a business plan that contains a distinct marketing strategy and solid financial statements. In addition, a thorough business plan will include your target demographic, present market conditions, ideal promotional strategies and essentially, how much capital you’re in need of to get your business off the ground. Also, your business plan should define how your company is unique to others, which is what will separate you from your competitors.

Elevator-pitch-webPrepare an elevator pitch

Explain — briefly — your business idea, strategy, plan, etc. — and why you’re excited about it.

“All you’re trying to do, whether it’s a three-minute pitch or a six- or eight-minute presentation, is to whet the appetite for a follow-up and get an in-person meeting,” says Somak Chattopadhyay, principal at Greenhill SAVP, an early stage venture capital fund in New York. Most important, put forth why your idea is different from the others out there — why competitors won’t be able to stack up to what your company can do.

Keep it simple

“In today’s busy world, with 140-character Twitter [posts] and one-paragraph Zagat reviews, everything has to be shorter and persuasive,” says Bruce Bachenheimer, competition founder and director of entrepreneurship at Pace. Before going to meet with investors, make sure that you know what you’re going to say — and make sure you keep it short and sweet. It also helps to offer information in a well thought-out, structured manner to avoid any confusion.

“If you’re constructing a way to present your story, you should be aware that most investors have small attention spans. They may be late to the meeting and they may be reading other stuff on their iPhone, so you want to organize your information in a way that allows them to process it more efficiently,” says Dave McClure, founding partner of 500 Startups.

Have real passion

If you really have a passion for your business, it will shine through. But be cautious that a potential investor will likely be able to see right through you if your enthusiasm is lacking.

“That is the trickiest part,” says Richard Sudek, an angel investor and assistant professor of entrepreneurship at Chapman University in Orange, Calif., and one of the three authors of that study. “We like you to show some excitement, but don’t force it. Being authentic is much more important. There is such a thing as quiet passion. Anything that comes across as slickness is a negative.”

Be honest

“If you don’t know the answer to a question, say so, and promise to get back to them. Don’t fake it,” says Sudek, adding that sometimes acknowledging where you need the most help can help to your advantage when pitching. In addition, keep your body language and stance professional. “A certain level of nervousness is expected but if you constantly shift on your feet this sends a signal that you aren’t trustworthy, maybe you are hiding something,” says private investor and real estate mogul Barbara Corcoran, who is also part of a panel of investors on the television show Shark Tank.

 

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