How To Pitch Your Business Idea to Investors

Posted by under Business . Published: August 19, 2016

A lot of people have good business ideas.

Most often, they try to go into entrepreneurship and see if they can put up that business, but will later on be discouraged as they realize that they don’t have enough start-up capital.

Fortunately, recent years have shown us betters ways to start a business.

There are now investors who can provide seed funding for us to begin our ventures and turn our ideas into reality.

However, pitching your business idea to investors is not an easy task.

And today, I’m giving you a few pointers to remember to ensure a well-presented and convincing business pitch.

But before anything else, let us talk about investors.

There are two (2) types of investors who can fund your business project: Angel Investors and Venture Capitalists.

pitching-to-investors

Types of Investors

An Angel Investor is a person who often use their personal money to help you achieve your business.

Usually, they’re someone from your family or circle of friends. They’re willing to take the risk for they believe that what you’re planning is possible and profitable.

The capital that they’re providing is often a one-time cash fund that will help you get started.

Venture Capitalists, on the other hand, are usually companies. They are capable of giving significantly larger amounts as an investment.

They are oftentimes not just interested in helping you start your business, but also to become your long-term partner in building and growing your venture.

With the two types of investors defined, it’s often recommended to pitch your business idea to an Angel Investor first, especially if you’re new to entrepreneurship. Because they have more manageable expectations and they’re easier to deal with.

However, Venture Capitalists are your viable option if you need both money and assistance for your planned business.

VC’s will certainly have the resources and manpower to turn your idea to reality. And they will help you achieve growth in the near-term, but of course — all in exchange for equity.

How do you pitch to investors?

There are a lot of factors that make a successful pitch. Here are a few key points that you need to remember:

Rehearse your pitch thoroughly.
An idea pitch often starts electric and exciting. However, be sure not to crash and burn during the latter part and fail to sustain that momentum from beginning to end.

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It is important to practice; this is a critical point that one cannot overemphasize.

  • Practice in front of a mirror. Project a strong, firm, and dedicated face.
  • List every important key point in an index card so you won’t stumble.
  • Be concise; get straight to the point when making the specific pitch.
  • Leave them curious and wondering so that they will ask you to tell them more.

Be compelling.
Never appeal to the pity of you investor. Instead, explain to them your business idea thoroughly and make them see why it is a reasonable investment for them.

Here are a few specific points on how you can be compelling:

  • Talk with true passion and sincerity but do not lose confidence in talking.
  • Grab their attention by mentioning your vision of the business in 2-3 years time.
  • Provide real-life examples of problems and solutions for your business; be concrete.
  • Be brief in order to avoid creating boredom in the room.

Prepare your solid business plan.
There are investors who do not require you to present your business plan but just to be sure, create your business plan and make sure it has solid numbers, concrete examples, and a staggering market.

Making a solid business plan might require you to hire someone, so be ready and open to working with a financial analyst or a business consultant to ensure that you have a well-thought of project.

Your business plan is where you will get the compelling numbers for your pitch, so it is crucial to get it right and be accurate with your data.

It should also have the smaller and more complex details about your business that you may not have time to say during your pitch. Because interested investors might later want to know them.

Tell a creative story during your pitch.
Grabbing your investors’ attention isn’t really hard at all. Telling a story about your business, how you thought about it, how deeply you fell in love with it, can convince investors to say “Yes” to you.

Tell anecdotes–yours or that of your target market; grab their interest and hold their attention with stories that are worth listening to.

business-pitch

Build a good team.
Investors invest more on the person, rather than on the business idea. They invest on those who they can trust and believe can make it work. So be sure that all members of your team possess these qualities.

Moreover, it’s important that your team is composed of people with complimentary skills and unique strengths.

During your pitch, highlight details such as their marketing experience, education, skills, and industry knowledge. Then connect these to your business–on how those are an asset that will help propel your business to grow.

Be ready with an exit strategy.
Some investors are fond of asking what your exit strategy is for the business is. So be sure to prepare one, given both the best and worst case scenario.

Present a concrete and realistic exit strategy that’s both practical and profitable, not just for you but more importantly for them.

Make your presentation simple but visual.
If you’re going to pitch with a slideshow, then go for a professional and simple presentation. Let your slides provide a summarized visual of your point, while they listen to you for the details.

In general, a pitch should only have 10 slides or less because you don’t want them to feel like you’re presiding over a board meeting.

In closing…

Pitching your business to an investor can be nerve-wracking, but it is not as hard as it seems.

It helps to remember that they’re there, taking their time off their schedule to listen to you, because they sincerely want to help you start your dream business.

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