How to Secure Your Business Investment
January 5th, 2009 Filed under: Uncategorized — Small Home Business AuthorPitching your business to potential investors can be a very intimidating experience even if you are already a successful entrepreneur. However, you can obtain the cash you require if you prepare sufficiently and know all the details of your business.
Many investment opportunities exist in the UK. Despite the current economic climate, you can obtain venture capital if you learn some effective techniques. The problem is that locating suitable investors for your business can be a daunting and time-consuming process. This is why it’s so important that you understand the process so you can ensure the people sitting in front of you during your presentation will be prepared to offer you their advice and financial input.
Understand Your Audience
Before you attend the business presentation, you need to know exactly whom you are going to meet. You should also research their previous business experience and investments. This will help you to highlight the elements of your business that would fit in well with their current portfolio.
Be Prepared
Just like the Scout’s motto, you always need to “be prepared.” You need to know your product, company and your competitors inside and out. It’s essential to be able to discuss the problem you intend to solve for your customers and exactly why they require your particular service or product.
Be Engaging
Make sure you present a sales pitch that is clear and compelling. Don’t overdo it if you choose to incorporate a PowerPoint slideshow in your presentation. Select a maximum of eight slides with one per minute, and ensure they contain visual information rather than merely text.
Remember to bring the actual product with you as it will enhance your presentation. Just don’t fall into the trap of presenting a lengthy software demo or you risk putting the investors to sleep. Test the product thoroughly before you enter the room! You should also discuss any pending patents to your potential investors.
Get to the Point
Make sure you respect your allotted timeframe when you present. If you are able to finish your sales pitch in less time, so much the better. Practice, practice and then practice some more in front of partners, friends and colleagues. Make sure you are able to convey all of your ideas within the specified time period and listen to any feedback you receive.
Stay Focused
Don’t try to explain every single aspect and application for your particular product or dwell too much on the actual technology. It is much more productive to remain focused on your market entry and to discuss your intended target markets.
Point Out Your Differences
Be sure to explain to your potential investors why your company is different and what problem you intend to solve with your particular product or service. Discuss your unique selling point (USP) by demonstrating how you offer a distinct advantage over your competitors.
Provide Proof of Actual Customers
You should be able to demonstrate that you have an actual customer base and be able to provide proof. There is no point trying to convince investors that you have a target market of 3 billion just because that is the current global mobile phone statistics. If you plan to target the mass consumer market, you should provide proof of market research you have conducted. This can take the form of customer feedback or trials, but it should not include industry analyst statistics. Letters of intent received from prospective customers are much more credible as they prove feasible market opportunities.
Memorize the Numbers
Make sure you know all of the important financial projections such as project turnover for at least 3 years, profit, loss, and costs. If you present accurate but simple financial data that back up your revenue projections, you will have a greater chance of obtaining investing funding. Investors will ask you more detailed questions during the process of due diligence.
Be Confident and Articulate
Investors are impressed with individuals who are articulate and confident. If you are pitching a start-up business, be sure to emphasize your prior relevant business experience. You must be able to prove that you are capable of offering successful solutions when problems arise. Investors are also looking for people who are very passionate about their business.
Ask Questions
Devise several well-thought out questions you can ask potential investors. For example, ask them if they are able to provide any feedback on your company strategy or if they can recommend anyone to include on your management team. Find out what level of board participation they expect if they decide to invest in your company.
The bottom line is that potential investors are interested in high-growth businesses that employ effective management and can present a proposition that will earn them a timely return on their investment. If you can present your case succinctly and confidently, you are well on your way to obtaining investment funds for your business.
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