You have validated your startup idea and found an unmet need.Now is the time to talk about your company with potential investors, customers, and clients.But how can you effectively convey the idea’s potential impact on the market and its promise?
One of the most nerve-wracking aspects of being an entrepreneur is presenting an idea for a business.It is what prevents your vision from receiving the funding it needs to become a reality.Even though it seems impossible, there are steps you can take to increase your chances of success.
Know Who You’re Pitching
Some entrepreneurs try to reach every investor, regardless of their industry expertise or the stage of their company’s investment.When you accept an investment pitch, you need to keep in mind that it’s not just about the money;You form a partnership.Before making your pitch, you need to do your homework and research potential investors.
Think about how you present yourself, not just your idea. Your personality is just as important as your ideas and skills.Venture capitalists’ interest in a startup was “driven less by judgments that the founder was competent than by perceptions about character and trustworthiness,” according to research that was published in the Harvard Business Review.
Additionally, investors want to be confident that they are entering into a partnership with the appropriate parties.In Entrepreneurship Essentials, Jennifer Fonstad, co-founder of Aspect Ventures, acknowledges that her investment firm “thinks about team and team dynamics as being very critical.”Investors want to know if the founders have worked together before, if your startup’s early hires have skills that complement one another, and if you’ll be flexible, open-minded, and willing to accept different points of view.
As you prepare your pitch, consider this.Will you respond defensively if investors point out flaws in your idea?Will you exaggerate the numbers when they ask for financial projections?Ideally, your responses are “No” — firms need to join forces with pioneers they can believe who are available to direction and mentorship — however assuming that you’re re-thinking your responses, consider what you may be asked and practice your reactions.
When describing your business idea, focus on the problem you’re solving and how you’re different from the competition.You could accomplish this by describing a real-world problem that a current or potential customer had and how your product or service solved it in a real-world scenario.This can make it easier for investors to get to know you personally and see the potential of your idea.
You can better convey the market opportunity and paint a more complete picture of your startup’s future by incorporating a compelling story into your spreadsheets and charts.
Set the Stage and Cover the Details
While setting the stage is essential, you must also cover the specifics.Share a memorable tagline and a succinct description of your value proposition in your pitch deck for investors to take away from the meeting.From there, communicate the possibility and specifics:
The size of the market
Your strategy for attracting and retaining customers How you can create barriers to competition Whether you can run inexpensive, quick tests to determine product-market fit Your strategy for monetizing the business and making money The amount of capital required Show the Roadmap Investors are interested in knowing how they will ultimately cash out.Highlight your exit strategy and the options available to clinch your pitch.
Merger: When one company acquires control of through the purchase of all or most of its shares.Initial Public Offering (IPO) occurs when two existing businesses merge into one new company:When a private company can begin raising capital from public investors after issuing its first stock sale to the public.