How to Pitch Investors for Your Business

Parnas Ghosh Parnas Ghosh
Feb 20, 2022 4 min read
How to Pitch Investors for Your Business

We are living at a time where startups are playing a crucial role in every country, they are turning into industrial giants that are taking the name of their country further and boosting their economy as well. Now, for any business start-up, the most crucial step is to organize funds so that they can take the business forward. Arranging for funds, however, can become a nightmare for many entrepreneurs.

Being an extremely important part of establishing a successful business, even minor mistakes made, while presenting your idea can lead to the loss of prospective investors and hence hinder the path towards the foundation of a successful business. This list here comes to your rescue, by putting down mistakes to avoid during pitching. In this article we will explore some vital points that will help you during the pitching for your business to the investors.

Know Your Investor
Work on Your Pitch
Focus On Your Presentation
Present Your Business Plan
Increase Your Investor’s Interest
Make Your Proposal Unique
Be Humble
Avoid Exaggerating
Do Not Show Desperation
Do Not Be Overconfident

Know Your Investor

If you want someone to invest in your startup the first step is to get to know them well. Do your research before approaching the person or organization. Some mistakes to avoid during pitching to investors for your business. There is no need to get personally close all you need is the small official details about their area of work so that you can use it to your advantage while pitching. Make a note of the different ideas that they have invested in earlier to find out what type of work they prefer to invest in. If you ask a person operating food chains to invest in a software business there are huge chances of you being rejected, so knowing your investor is extremely critical.

Work on Your Pitch

A chance to pitch can come up anywhere, a party, elevator or public transport. However, in these situations, there isn’t enough time at hand so reduce the length of your pitch. Ideally, try keeping it a minute or two long. Most people start losing interest after a minute, hence, make the pitch small and effectively highlight all the attractive and remarkable points so that the investor is intrigued in doing business.

Focus On Your Presentation

Usually, start-up organizations end up putting all their points and ideas into a presentation hoping that the investor will be impressed, but a presentation filled with too many words will cause more harm than good. When presenting, keep in mind that your slides only have a gist of the plan of action. It should be short, crisp and to the point like your pitch. Try to wrap up your presentation in 12 to 15 minutes. Generally, you will get only half an hour with the potential investor including the time for Q&A, therefore, use the time wisely.

Present Your Business Plan

The pitch and presentation won’t be of any use if the business plan is not thoroughly laid out. If the business strategy does not highlight the goals of the start-up along with the expected revenue, size of the target market, and description of the start-up management team, the investors will not be convinced. The important point is to make them realize how strong the business is.

Increase Your Investor’s Interest

Every person wants to start a new company to provide people with better facilities and give them something but that’s not how an investor would think. An investor will only agree to fund a business if he is sure of gaining a profit; hence, you need to make sure that you mention your expected monetary gains for the next few years.

Make Your Proposal Unique

Sending your proposal to every potential investor through email in the hope of getting a response will not yield any results because investors are swarmed with thousands of proposal mails every day, so the chances of getting a call are very slim. You need to find unique ways of making your proposal stand out, so that it can invest your potential investors.

Be Humble

When you land an interview, with the potential investor, be humble. Let them ask questions. If any flaws are pointed out in your model or plan, accept them and find ways to improve them. The investors have seen their fair share of business proposals and the advice they give will be beneficial. Do not be stubborn and keep an open mind while answering. The reason an investor ask questions is because they are interested and wants to make sure that they are putting money in the right place.

Avoid Exaggerating

Exaggerating financial gains and lying about them is going to get the proposal rejected instantly. The investor will want to know exactly where and how much money is being spent. If you get caught while lying, it could make a big opportunity slip through your fingers.

Do Not Show Desperation

The funds are extremely important for the survival of the business. There might be an urgent need for the funds but showing that desperation to the investor would be a wrong call. Confidence is crucial and you must possess that regarding your  your business idea as it is very crucial.

Do Not Be Overconfident

Even though being confident is good, being over-confident and bragging about the growth and profits of the business will drive the investor away. This will give them the impression that you are not realistic and will get you rejected. Try to be subtle while approaching the potential investors.

Conclusion

It's always challenging to pitch your ideas to Investors as an entrepreneur. Focus on numbers while presenting your story in front of investors. Don't forget to share the marketing plan. Otherwise, practice your pitch and dress well. Prepare yourself for your next pitch, while keeping the above points in mind.

FAQs

How to find investors for business?

Look for relatives and friends who are interested in your business, private investors are also there to choose from, crowdfunding platform can also be used to find investors.

What are the three types of Investors?

The three types of investors are Pre investors, passive investors and active investors.

What is a good percentage of equity that can be given to an investor?

15% to 20% equitry is a good number to offer an investor.

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