Make a Winning Investment Pitch in 2012
Do you know how to make a winning investment pitch – one where your business is more likely to be perceived as ‘fundable’?
Whether you have a start up company or have been trading for a number of years, one thing is for sure, good products or ideas won’t be enough to make your business successful. You also need cash, commonly in the form of investment capital.
And securing money from hard nosed investors can be a tough challenge.
However, there are a number of things you can do to greatly improve the chances that each investment pitch you make will be successful.
#1 – Research the heck out of your audiences
Take the time to fully research potential investors before you think of asking them to invest in your business.
Never turn up to an investment pitch if you haven’t investigated:
- The business and financial profiles of investors in your target audience
- Industries they are interested in
- The scale and kinds of investments they have supported in the past (be sure to find out if they have form in investing in start ups, more developed businesses and/or pre IPOs)
- Experience they can bring to the table in addition to money?
- How hands on they tend to be with their investments (are they generous with their time and do they apply tight or loose reins?)
- Results have they achieved
- The kinds of return they expect for their money
Make it a point to try and speak with people they’ve invested in before, you’d be surprised how revealing and helpful these conversations can be.
#2 – Simplify, simplify and further simplify your investment pitch
Winning investment pitches tend to have something in common – a great idea, well told.
Don’t make life hard by burying your big idea in a sea of words and charts.
Understand that investors tend to have a limited attention span and no shortage of other suitors for their money.
The act of simplifying your idea to one compelling theme will tend to give you an instant edge over most people making investment pitches. Be assured, complicated ideas are always a harder sell!
As a starting point you could try filling in the following:
“With _________ (idea), now you can ________________ and ___________ (essential benefit)”
#3 Make it easy for your audience to visualize the benefits of your ideas
A physical demonstration of your ideas can go a long way towards enticing investors to get excited about your products or services.
This allows your audience to experience what you hope your existing/prospective customers experience and is always more memorable than a product description.
Add to this proof of demand for your products.
Investors like to know that others are prepared to pay you cash money to buy what ever you are selling. And the more customers and demand you can point to, the less risky your venture is likely to seem (subject to discussions on margins, cost control and managing debts).
And be sure to mention any patents or trademarks you have or have applied for that may afford you some competitive advantage in your chosen markets. Investors love to hear about opportunities where competitors can’t mimic or surpass your offerings.
#4 Answer the ‘Why Us’ question
This is critical in every investment pitch. Investors don’t just invest in the potential of companies and products – they also have to believe in the people who say they will make that potential happen.
Never underestimate the degree of confidence you need to instill in prospective investors that you or your team are individually and collectively ‘investable’.
At the end of the day, investors who put money into your ventures are making a bet that ‘you’ will deliver a return for them. They will want to feel reassured that they can place trust in you and are more likely to feel this way if they like you. Make sure that they feel that a relationship with you will be plain sailing versus a source of choppy water.
Now it’s your turn
What are your greatest worries when it comes to making a winning investment pitch?
What lessons have you learned over time?
your next steps
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