On the journey of entrepreneurship, there will be a moment when the route leads to a door labeled ‘Investors’. Behind this door, dreams are shared, futures are shaped and it is normal if hands become somewhat clammy. This is the art of pitching to investors.

Your First Steps in Pitching to Investors

Think about entering a room, where the atmosphere is filled with expectation. Confidence is your armor. You have faith in your idea, you trust your vision, and above all, you believe in yourself. However, take into account that confidence should not be confused with arrogance. It means showing your openness to suggestions and readiness for change. It involves proving that you are a partner, not only a dreamer.

Now, let’s talk about vision. It’s the North Star that guides an entrepreneur. It’s the dream of what could be. But it’s also about being realistic. It means demonstrating that you comprehend your intended market well, have a workable plan, and possess strategies to tackle possible issues.

Passion is the energy that motivates an entrepreneur. It has the power to brighten up a room and influence others around. But enthusiasm without practicality is like a ship without a rudder. You must demonstrate that you have considered the details of your business, from your strategy to enter the market to your financial projections.

In this blog, we are going to dig deeper into these elements and look at the dos and don’ts of pitching to investors.

The Dos

Do Your Homework

In the process of pitching to investors, one of the earliest and most important stages is completing your preparation. This not only involves having complete knowledge about your business (which is mandatory) but also comprehending the nature and expectations of the investors you are presenting to.

Investors are of various types and sizes. Some may be angel investors, putting their own money into startups at the initial stage. Other investors could be venture capitalists, they take care of others’ collective money in a fund managed professionally. Knowing the kind of investor you present to may help you in crafting your presentation according to their peculiar interests and concerns. As per Dropbox, venture capital investors, spend 2.4 minutes to 2.6 minutes reviewing pitch decks. This statistic emphasizes the importance of making your pitch concise and impactful.

But it’s not only about the type of investor. It’s also about the person or company you are presenting to. What industries are they interested in? What’s their investment history? What is the usual size of their investment? You should already know the answers to these types of questions when you begin presenting your proposal to investors.

When you complete your homework, it also comprises knowing the market in which you are working. Who can be considered as your competitors? What is your unique selling point? What’s the size of the market and its rate of growth? Investors would be interested in finding out if you have done comprehensive research on your market. They also want to see that you possess a well-defined plan to approach it.

Finally, completing your homework means getting ready for challenging questions. While pitching to investors, you must be prepared to respond to inquiries concerning everything from your financial forecasts to your exit strategy. When you’re prepared more, your confidence will look higher and investors have a greater chance to consider you seriously.

Don’t forget that pitching to investors is not only about selling your company. It’s also about demonstrating that you’re an intelligent entrepreneur who has done your research and is prepared to make the business successful.

Do Tell a Story

When you’re pitching to investors, it’s not only about displaying facts and numbers. It’s about telling a story. Your story. The story of your business. Like every good story, it should contain an interesting narrative, characters with whom one can relate, and a plot that maintains the audience’s interest.

Start with the ‘why’. Why did you start this business? What problem are you trying to solve? This is the heart of your story. This is what motivates you, and it’s the same thing that will inspire your investors to have faith in you.

Next, introduce your characters. In this case, it’s your team. Who are they? What are their backgrounds? What unique skills and past experiences do they offer? Investors are not only putting money into an idea but also in a team. Demonstrate to them why your team is the suitable one to make this idea become a reality.

Now, we discuss the plot. Here is where you outline your business model, your market analysis, and your financial projections. But do not forget, you are narrating a story. Hence, simply providing facts and numbers is not sufficient. Instead, incorporate them into your story. Demonstrate to your investors the way in which over time, your business will expand and transform.

Finally, end with a strong conclusion. This is your call to action. This is the point where you request financial backing and demonstrate to your investors how they can participate in your journey.

Remember, when you’re pitching to investors, it is not only about having a business plan. It’s also about creating and sharing an inspiring story that gets them excited and motivated. This way, they will be convinced to come along on your journey of entrepreneurship.

Do Use Data

Another thing you should do when pitching to investors is the use of data. Information is your greatest partner. It forms the core of your business proposal, proves your claim, and acts as a propelling force for you. But how do you use data effectively when pitching to investors?

First, support your statements with data. If you claim that your product is superior to the competition’s, present them with the data that confirms it. When you say there is a big demand for your product, present them with the market analysis. Data gives your pitch credibility and shows investors that you’re not just making empty promises.

Second, you should utilize data to illustrate the future scenario. Investors are not only concerned about your business’s current position but also its projected path or direction in the future. Use financial forecasts, market growth rates, and other important data to give them a vision of what could be possible in the future.

Thirdly, use data to highlight your successes. Have you already made some sales? Have you grown your user base? Have you received positive customer feedback? All these are information that can assist in persuading investors your business is heading in the correct direction.

But don’t forget, while presenting to investors, it’s not only about having data but also how you utilize it productively. Avoid bombarding your listeners with too many figures. Rather, choose the most effective data pieces and display them in a manner that is easy to understand and captivating.

Finally, when pitching to investors, data is not just figures on paper. It is a strong instrument that can assist you in narrating your story, proving your argument, and persuading investors to join the journey.

The Don’ts

Don’t Overpromise

Excitement is infectious, particularly when you are pitching to investors. You have a passion for your business and it’s normal to share such excitement. However, it’s important to keep your feet firmly planted in reality.

Promising too much can show up in different forms during your presentation. It might be very positive financial forecasts, not reasonable timelines, or underestimating the troubles that your business could encounter. Although these things may make your proposition appear more appealing momentarily, they could result in disillusionment and a decrease in trust over time.

Investors are smart. They know that creating a successful business is a complicated task full of uncertainties. They respect founders who can provide a fair perspective of their business, recognizing both the possibilities and the difficulties.

When you speak to investors, it’s important to display ambition and equally necessary to express honesty and realism. Demonstrate that your dreams for your company are high but at the same time exhibit a clear comprehension of what is required in order to reach these goals.

It is significant to market your vision when pitching to investors, yet just as vital not to sell them a dream that you cannot fulfill. Remain honest about your skills and the circumstances of your business, and this will earn respect from your investors.

Don’t Ignore the Competition

Recognizing your competitors is very important when you are pitching to investors. It’s not showing that you are weak, but it proves that you have a complete comprehension of the market landscape. It demonstrates that you are conscious of your environment and prepared to face the difficulty.

Every company faces rivalry. This could be direct competitors who provide a comparable product or service, or indirect competitors who can cater to your potential clients’ requirements in a different way. When pitching to investors, it becomes crucial to recognize rivals and understand what they bring to the table.

However, it’s not solely about recognizing your competitors, but also grasping how you’re unique and superior. This constitutes your competitive advantage. Your special technology, innovative business approach, excellent team, or deep understanding of customers could be it. When you present your case to investors, remember to emphasize what sets you apart from the competition.

In addition, knowing about your competitors allows you to understand the market trends, possible problems, and chances for distinction. It assists in predicting difficulties and preparing your tactics as per that. This level of market awareness can be a powerful tool when pitching to investors.

To conclude, it is a big error for founders to overlook their competitors. Recognizing and understanding the competition is a very important part of pitching to investors. It demonstrates that you are realistic, well-prepared, and capable of handling the competitive nature of your field.

Don’t Forget to Follow Up

The process of pitching to investors doesn’t stop when you exit the room. In fact, one might actually suggest that it’s only the starting point. The next step is a very important part of the process, it can make a great difference to the result of your proposal.

When you pitch to investors, don’t forget that these investors are busy people. They have meetings with many business owners and look at an endless number of business plans. Your proposal needs to be unique, not only during the presentation but also afterward in the follow-up.

Doing a quick follow-up communicates to investors that you are committed to your business and respect their time highly. This is the chance for you to express gratitude for their time, provide any extra information they requested, as well as respond to any concerns or questions they may have raised during the presentation.

Furthermore, the follow-up presents an opportunity to continue the conversation. When you present your idea to investors, it’s important that your aim is not just securing funds but also building a relationship which requires consistent communication. You must provide them updates about how you are progressing, tell them about the milestones achieved, or share some interesting developments in your business sector.

To end, the follow-up is a key part of the process after pitching to investors. It’s not only polite but also a smart move that can help you stay in sight of investors, show your professional attitude, and finally enhance your probability of gaining an investment.

Conclusion

The path of pitching to investors is tough but also gives benefits. This process checks your knowledge about your business, your market, and the competitors you are facing. It encourages you to express your vision, justify your thoughts, and sell your potential. But most significantly, it provides a chance for you to secure the resources required to make your business dream come true.

When pitching to investors, don’t forget that preparing well is necessary. Do all the needed research, grasp your industry’s understanding, and have knowledge about who you are competing with. Craft a compelling narrative that showcases your business’s journey and displays the prospects of your concept.

Use evidence for backing your statements, however, don’t overlook the influence of a well-told story. Be bold in setting goals but maintain realism while making future predictions. Recognize your competition, but focus on your unique value proposition.

When you have finished presenting to the investors, remember not to ignore following up. Maintain open contact with them, share updates about your growth, and keep strengthening the relationship.

Finally, pitching to investors is not only a presentation. It’s a conversation, connection, and a stepping point for your future. So, go out there, pitch with confidence, and make your entrepreneurial dream a reality.

If you’re planning to raise funds soon and need help creating a business plan, a pitch deck, and/or a financial model, we would love to help! Book a FREE call or contact us to get started today!