Editor’s Note: This is a guest post by Justin Osbourne. His opinions are his own.
Entrepreneurs often find it hard to attract potential investors. Companies and venture capital funds are skeptical of investing in unproven projects and concepts. Why is this the case? Due to an unstable financial climate and bad decisions, 50% of small businesses fail in a period of four years. Incompetence and experiences are also major factors.
If you have investors reaching out or responding, you’re one of the few lucky ones. However, attracting investors is the easy part – impressing them is the hard part. In this guide, we’ve decided to cover the top 8 methods of impressing investors. Each of them is universal and doesn’t relate to one specific niche. You can do it, trust us!
Whether you’re negotiating with a venture capitalist or an angel investor, it’s important to present your goals and intentions the right way.
A detailed business plan should include all your goals for a certain time period. Each individual project should be segmented into smaller sub-categories, for better understanding.
Don’t go into too much detail in writing, as it will only confuse investors when they’re listening to your pitch. Include several bullet-point lists and elaborate each point using only the most essential details and descriptions. A business plan is nothing without a good presentation and vice-versa.
Perhaps the most overlooked method for impressing investors is presenting what your brand has achieved in the past. Too many startups focus on potential, future plans and other ideas that fall into the category of uncertainty.
Not too many investors want to put their money into brands without any achievements behind them.
The crux of your pitch should include all your past accomplishments. While it’s recommended that you play to your strengths, it’s not a good idea to overdo it. Pick only the most relevant achievements and organize them in chronological order.
If your revenue has been slowly increasing with each quarter, a logical procession would be a continuation of that trend, right? Certainly. Don’t forget to provide the paperwork as proof, even if it’s not requested during any of the meetings.
This approach is known as the elevator pitch. It might seem like a daunting task, but just stop for a second and think “How would I describe my brand to someone during a short elevator ride?”
The essence of every elevator pitch is brevity and effectiveness. Each point should incite curiosity and more questions from the investors. More options to elaborate your project results in a higher chance to close a deal that’s beneficial for both sides.
Model your pitch according to these key questions:
Six questions and precise answers are all you need for an introductory meeting. It opens up pathways for additional inquiries that the investor(s) might think of. Answering each of these aspects will make you seem more determined and prepared.
Detailed business plans are always welcome, but that shouldn’t be the only method at your disposal. Pitch decks are valuable aids when you’re trying to get the initial interest of an investor.
Before you lay out the entirety of your business plan, you can use pitch decks to impress them. The most effective examples of this method consist only of two parts – the problems it solves and the solutions it presents.
When elaborating on the problems in any market or niche, focus on statistics. Draw clever, non-obvious conclusion from each set of statistics to emphasize the problems. In the solutions sections, provide concise, doable solutions and propositions. Use active verbs and avoid too many adjectives, adverbs and unnecessary words.
Airbnb’s pitch deck is something you should look up to. Short and to-the-point.
A sneaky, but efficient way of gaining the trust and interest from investors is to achieve complete brand presence during the presentation. What does this mean? A branding inclusion involves adding your logo, colors and signature approach(es) to the presentation.
Too many startups only focus on projects, but neglect identity and branding. Investors have become wary of apps that only exist to be sold to larger companies and brands.
Not branding your presentation slides gives off an impression of a sloppy and undecisive brand. Including brand elements suggest that you’re in it for the long run, not just for a short test run followed by a sale. More and more investors are interested solely in long-term projects, with clear-cut branding.
You’re ready to change the world and provide solutions to current problems and that’s splendid. However, that’s not enough to convince investors that your precious project won’t come crumbling down.
Think about the issues that your project and brand can face in the future. Highlight them or even devote a separate section to them. Begin each point with “In case of…., we are prepared to….”.
Investors want to see that their money is safe even when the circumstances are not ideal. Letting them know that you know how to tackle problems is about the best impression you can make.
Not all investors are the same. Some angel investors like to sit back and let you take care of everything while they cash in. Others prefer a more hands-on approach, where they will be constantly involved with ongoing projects, promotions and efforts.
To impress these “more difficult” investors, you have to make the meeting interactive. Letting them participate is the best way to impress them for good.
If you want to take this interactive approach a step further, do research about the investor(s) and their past investments in your niche. Ask them for advice and admit if something isn’t clear. Healthy communication is essential when trying to impress investors.
Organization is the magic word when it comes to attracting all the funds you need for further growth. Every serious investor wants to know who exactly are the people who are handling their money.
As a part of your presentation, let your team members do the talking and explain their roles. This method sends out a message to investors that your company is a well-oiled machine.
Well-defined roles are an important step on the pathway to closing a deal with investors. Think about promoting people to co-founders. Investors tend to trust the leadership in the form of a group more than startups with only one person in charge. When there are more people to do the work, there are less chances of failure.
There are different kinds of investors in every niche, but all of them value transparency, decisiveness and efficiency. With a no-nonsense business plan, you’re only opening a door for more investment proposals and cooperation offers. Don’t forget to ensure investors about your preparedness to face problems and setbacks. Most importantly – be confident and express yourself clearly. Good luck!
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