How to pitch your business to potential investors: 3 tips for success
They list the recipe for success in pitching a business to market. The advice is usually knowing your market, having a solution to a key problem or challenge for your potential client base, understanding revenue models and streams, identifying the unique selling point – the list continues.
My question is, with all these ingredients in the mix, what is it that makes the perfect investment recipe?
Whilst it’s important to have these ingredients, you also need to have your own personal twist to your pitch to make it stand out. You also need to understand three key concepts to successfully pitch your business to potential investors.
Gaining investment is a sale
You need to realise that the process of gaining investment is packaging a business idea itself as a product for sale.
You need to focus on the strengths and understand the weaknesses. Pitching a business to investors is a complex and multifaceted sale and is potentially the biggest sale the business as an entity will ever make, and remember, people buy people they’re investing in you as a person, as well as your business.
There are only so many ways to reinvent the wheel, only so many new patented products or ideas that will be revolutionary and in themselves 100% commodity-based investments. For the rest of us, what is it that the investor will be buying into? Ultimately investors will be buying into you. It is your vision, your team, your commitment to make it work. What is it about you that will make you the person, not the business, that they will want to invest in?
You also need to think about the questions theyll have for you and what your answers will be: what is it that is being bought What are your investors buying? A unique product or service to the market? A commodity or product-based business?
Balance the sale with scales of value
In the process of pitching the business, the scales may tip, and balances change as a deal evolves. You need to understand what it is you want from the deal. What does your investor bring to the scales? What do you want from them? Is it funds, contacts, knowledge, skillset, infrastructure?
The monetary value of a potential investor is sometimes not as valuable to a business long term, as other potentially non-financially quantifiable elements.
The deal realised may change and the ultimate business deal could evolve. Be prepared to adapt and remember, you will not be the only cook in the kitchen!
If it is too hot you can step out of the kitchen
This sale is not just you to investors, it is investors to you. You are just as valuable for the investors as they are to you.
No matter how game-changing your idea is, or how much money it stands to make, without cash reserves or an extremely lean business model, youll need money and that means youll need to court and impress investors. more»
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