An entrepreneur not only has to sell to their customers but also to investors and that, according to business coaches, is one of the most feared tasks reported by future or current entrepreneurs. Although some attempt to fund their own startup, for more capital intensive businesses, that is often not possible. Even if you are able to fund your business on your own, there are some reasons why that may not be the best idea.
The reason why you need a startup-pitch is because an entrepreneur quickly needs an investor for diversification. You cannot commit 100% of your retirement savings to the opening of your business and you can’t use all of the equity in your home either. By spreading the potential liability out to other investors, you don’t have to put your entire financial net worth at risk. Therefore it is a great idea to evaluate a pitch strategy to attract investors.
When pitching to investors it’s not always about the capital or financial backing they provide to a start-up but, they come with expertise that can make your business successful long after they leave. Practice your sales pitch and set up with some meetings. Startups most often fail because of underfunding. Don’t let yours be the next.
Here are the few essentials steps for creating an Effective Investor Pitch:
Open with a proper introduction –
The very first step towards nurturing an effective investor’s pitch deck is to introduce the purpose of your idea in the form of presentation. It is advisable to provide an ultimate objective of seeking financial backing for a later slide; you can start by stating basic agenda of the presentation. Be careful to update this as it is a given that you will be pitching to multiple investors over several months. In case you have had a start-up prior or have been associated with a company the target investor may identify with, make sure to mention in the presentation.
Describe your Ideology –
The next slides should carry out details of your start-up strategy and idea of your product and services. It can be either be the actual working model or snapshots of the demo created by you. In case your start-up has existing clients, it is advisable to mention their names and include testimonials from them.
The report of your product or service needs to highlight how it distinguishes itself from other existing startups or is an improved product/service. The presentation should give confidence to the investors about the uniqueness and effectiveness of your start-up strategy. The strategy must be presented in a way that the investor agrees or identifies it as indeed being a start-up worth investing. A well-detailed business plan also helps investors to see the value in investing in your venture.
Describe the Target Market –
While elaborating the categories of customers your product or service will cater to. It is crucial to have an in-depth analysis of your market on the basis of various relevant parameters. This will help define the relevancy of your product and services in a particular market segment. However, it is necessary that you research your target market and explore all the possibilities of your products being relevant.
A well-documented business plan can help you in provide well-researched and detailed market research for your understanding of target market.
Describe Your Business Model –
When it comes to start-ups, the investors will look at business model with utmost scrutiny, so be sure that your business model is well-defined and structured. You need account for all possible avenues of impact on your business and accordingly devise and present the business and revenue generation model in your investor pitch.
At certain times it is advised to include an exit strategy as part of the presenting your pitch because ultimately the investors are considering their ROI.
Pinpoint your Unique Selling Proposition (USP) –
If your product or service is very niche, it is a USP in its own right. However, if you are launching a product or service with a number of existing competitors, your USP is what will help in marketing your offering. It is important to explain to the investor about how your core offerings are unique and how this is relevant to and caters to the target market as identified by you.
Stipulate your Finances –
It is the important part of your investor’s pitch deck. You need to specify the range within which you need financing from investors. You have to be extremely specific with your demands as it helps in showcasing a range of amount from minimum to maximum that you need for your company.
This helps you reach out to a wide range of investors who can invest a suitable amount within the investment bracket.
The pitch must cover important details of your business finances with projections that reflect growth potential and can offer attractive Return On Investment (ROI) for the investor.
Conclusion:
Your investor pitch deck needs to be written and designed in a way that it is encourages investors to engage and initiate a dialog with you.
Since they receive multiple investor pitches, be sure to make yours crisp, concise and compelling.
