Whether you are the founder of a startup or an established business, pitching for funding is incredibly nerve-wracking. But why? That’s because investors and venture capitalists meet with hundreds and thousands of business owners each year and only invest with a handful of them.
Don’t worry. We aren’t here to scare you. We are here to help you pitch your business idea in front of investors and VCs successfully. So, let’s get started.
1. Understand The Need of Different Investors
The way you pitch to Angel Investors is very different from the way you pitch to Venture Capitalists. When you pitch to venture capitalists, focus on metrics, details, and potential risks. They are detail-oriented people who are more interested in knowing numbers. They write cheques on behalf of other investors so they are obligated to make smart decisions.
When pitching to angel investors, focus more on the potential upside, the market size, and the bigger picture. They are quicker to act and are high net-worth individuals.
Include every possible information, especially answers to the possible objections investors might raise. This will show that you have done enough research on understanding their needs.
2. Create A Presentation
After understanding the needs of investors, you need to prepare your pitch. Pitch creation should be in such a way that excites the investors. You should prepare both, a shorter version of your pitch that lasts for only 10 minutes and an extended version as well just in case the need arises.
After you finish your pitch, investors ask a few important questions. So, don’t forget to prepare yourself for the Q&A round. You can easily win this if you practise well.
The pitch can only be fruitful if you deliver it with confidence and that would require practising as much as you can. Practice in the mirror, do mock presentations with friends and record them to understand how you performed so that you can do improvisations.
3. Be Confident and Respectful
It’s absolutely normal to feel nervous while pitching. First and foremost, believe in yourself & your idea and have all of your numbers straight. Do slow inhalations and exhalations to calm your body.
Also, if you are feeling nervous, it means you care about your business. Keep everything in mind and speak about it conversationally. You don’t have to put everything on the table in one go. You will get the opportunity to include more information in the Q&A round.
Another important thing is to remain respectful to whom you are presenting your pitch. They are the people who put their money at stake, hence they may ask questions which puts your business idea into question. Listen very carefully to the questions they raise, and be empathetic and respectful.
Also Read: Effective Investing Strategies To Thrive In Turbulent Times
4. Tell A Story
The chances of getting the funding increase if you present your business idea through a story. Either you can draw it from your own life experiences or can narrate a hypothetical situation. Your story should address the problem you’re solving in the market.
It’s quite obvious to note that investors are interested in numbers but you gain their confidence when you create an emotional connection as you tell the story of your business.
The pitch should also include what’s unique about your product or service. If you have done some surveys, research, or testing, including the actual data as the figures will add credibility and genuineness to your pitch.
5. Research On Every Investor
Prepare a list of all the investors you will be presenting your business idea to. Do your research on each investor and try to find answers to:
- The kinds of startups they have invested in before
- The kinds of questions do they ask
- Their area of expertise
- What makes them say Yes and No
Not every investor is interested in the same details. The behaviour of each interest is different, so you need to act accordingly. You won’t be able to find detailed information about the investor on Google so you have to take the extra pain of connecting with Founders who have already dealt with these investors.
6. Understand Your Target Market
You can impress investors with ease if you understand your target audience. You must know who you’re building your product or service for. Everyone in the world can’t be your target market (however, it can be true one day).
If you put forth your target market, this can help investors visualise the potential customer base and understand the scalability of your business.
7. Your Revenue Model
The most important question is: How do you make money? Investors tend to care about the business model the most. Tell the investors
- How much money you have made so far?
- What’s your future projection?
- Where do you see your company in the next 10 years?
- Are you planning to invent new ways of earning revenue?
8. Why Do You Need Funds
You are building a business and therefore must know its ins and outs. You should be very clear about
- How much investment do you need for your business?
- Why do you need it (for example, for marketing, taking the business to the international market, product development, and more)
- What will be the funding runway?
9. A Demo Is A Must
Providing a demonstration of your business can be highly beneficial as it projects a real picture of your business.
This provides tangible evidence of how the product or service works, how the users can benefit from using it, and help potential investors engage with your vision.
10. Take Feedback
Whether you receive the funding or face rejection, you can’t forget one thing: feedback. Feedback from the investors can help you refine your business idea in a much more efficient manner.
Treat every pitch as a learning experience for your business. That’s how you can get better and better with each passing day.