Already this year we’ve run into some business owners who need funding but who haven’t yet been willing to invest the time and money up front on their pitch. Pretty ironic, isn’t it? Asking for an investor to lay their hard-earned money on the line to invest in a business when the business isn’t willing to invest in themselves?
You know the typical results in this scenario – they won’t get funded.
We’ve mentored dozens of companies seeking funding – including more than 10 at Invest Southwest Capital Conference. Well over half have been successful. Here is a video we’ve done on the topic that is posted at Invest Southwest TV.
Also here are 5 tips to consider as you assemble your funding pitch.
1) Know your business. First and foremost, know your business. Clearly articulate the value for customers and how you’ll make money. Tie that back to how they’ll make money. Backup the information with solid facts and not passionate hyperbole. Be real, and have an outsider check that for you.
2) Target investors, not customers. Don’t start with your sales presentation and modify it for investors. Start from scratch. Begin with what you’ll need to cover with the investors – including the management team (and how they’ve done this or something like this before), the business model, how you make money, how they’ll make money, financials to-date and a solid forecast. On the forecast definitely don’t use the “1 % of the market” approach. Overall tailor the pitch to an investor, not a customer. Your business is the product.
3) Rise above the noise. Know your differentiation to an investor versus other investments they could make. Be short and sweet, get to the point quickly and don’t fill in time with noise. You’ll all be the better for it – and it’s a reflection on your management skills.
4) Build credibility and confidence. Reference others who can talk to the opportunity, business and capability of the management team. In the video example at the link above, you can hear how a CEO used a former investor as an introduction to the presentation to quickly build credibility with the audience.
5) Invest in yourself. It’s pretty simple – no one will invest in you if you don’t invest in yourself. Get your presentation content and appearance spot on and get outside opinions before you start pitching. You’re too close to it to be objective. Take the time and a little money to invest in yourself, and the rest will take care of itself.
Don’t let a poor presentation be a barrier to getting funded!
About Doug Bruhnke
I’ve done many pitches with my clients, and this is a great list. I might add: be ready for the question for which you have no answer, even if it seems like a really dumb question. It might be about use of funds, about how your product works, or something totally out of left field…but it’ll happen.
In that case you’ve got three options: 1. “I’ll get back to you”; 2. Start making stuff up (don’t do this one); 3. Get somebody on finding the answer while you continue your pitch.
Thanks Stuart, and good addition!