Funding is the oxygen to any business. Although many startups focus on improving their concept, the idea itself is one of the least weighted factors considered by investors.
Startup investors listen to pitches constantly and while they are presented with many “great ideas,” very few entrepreneurs walk away with a deal. An opportunity to pitch your idea to a potential investor doesn’t come your way easily.
Here are 5 things to get right before approaching your investor:
1. Upfront Research
To attract someone’s money, firstly you need to get your investor’s psyche. Spend time understanding your investor’s passions, aspirations, vision, and businesses she has invested in previously. In the process, your idea gets validated and it might lead to a connection with your potential investor’s passions and goals.
This will help you establish a personal connect and keep the investors hooked in the course of your meeting.
2. A Clean Credit History
Both parties should make attempt to understand each other’s financial history. A proper credit history is a proof that you can responsibly manage funds and pay your debts. You could also provide financial statements which show how well-run your organization is.
This is extremely important because investors are cautious about entrepreneurs with major red flags on their record, such as a bankruptcy or a loan default.
3. A Modest business plan
While drafting a plan detailed enough for investors, entrepreneurs often present optimistic numbers and set unrealistic expectations. Always stay conservative on your numbers. If you end up doing better, well that’s good news to your investor.
Set the expectations early, straight and right.
Also Read : 7 types of Investors you will face
4. Decommoditize your Product
You and your key people should be able to talk about what’s ahead for your business both in terms of opportunities and risks. Every decision you take must resonate with your vision.
Pour yourself into your product or service and everything around it too. This builds trust in investors that you and your team can execute the ambitious business plan you’ve presented and stay financially strong.
5. Develop a Great Pitch
Share the story of your business through your pitch. Make it concise but detailed, informative but persuasive, and most of all, memorable. It should also describe why you have the right team, the right product and the right strategy to move it to the next level of success.
A pitch deck is the only sales pitch for your business. So, you should be creating a winning pitch deck!