As a new startup entrepreneur, you'll have multiple opportunities to make a good impression with prospective investors, and if you do, you'll be able to raise more funds and accelerate your initial growth. But if you want to make a truly positive impact, it's important to do your homework and find a way to exceed expectations.
What are the most important tips to follow to make a better impression when pitching to investors?
Tips for Startup Entrepreneurs Pitching to Investors
If you're ready to start presenting your startup idea, or your plan for the future of your startup to investors, these are the most critical tips for success:
- Book a conference room at a coworking space. First, book a conference room at a coworking space in your area. It's typically better to present in a space that you're familiar with, and a space that you control, than it is to present in a space controlled by your audience. You'll feel more confident and you'll be capable of making a better impression. On top of that, booking a conference room at a coworking space rather than, say, a hotel room, can be a demonstration that as an entrepreneur, you're tapping into modern trends and you know where you can be most productive and effective.
- Get familiar with the space. After booking the conference room, get familiar with the space. Spend some time practicing your presentation in it, and definitely test out the technology so you can use it confidently on presentation day. If there are any kinks to work out, now is the time to address them.
- Do some background research. Before preparing your presentation in detail, do some background research. Who is your audience going to be? How do these investors think and what are their main priorities? What types of projects have they funded in the past? How can you best appeal to them?
- Get your numbers in order. One of the biggest priorities for investors is ensuring they can make a reasonable return on their investment, so your numbers need to be rock solid. It's important to show the long-term earning potential of your business, as well as the expenses you'll face along the way. Even more importantly, you need to make sure your numbers are realistic and grounded in research.
- Frame your pitch as a story. Human beings are wired to love stories. Accordingly, you can usually make a better impact with your investors if you frame your pitch as a story. What is the typical experience of your users/customers going to look like? How was the idea of your business conceived? How do you see your business growing over time?
- Prove that you've done your due diligence. Investors want to see projects that are based on objective facts and thorough research. Accordingly, you need to prove that you've done your due diligence. Can you show that you already know and understand your biggest competitors, your target audience, and the most effective marketing strategy for your brand?
- Stand out. Investors typically see hundreds of pitches for businesses, so they don't have much patience or tolerance for ideas they've already seen countless times. If you want your presentation to be more effective, you need to find a way to stand out. What makes you unique as an entrepreneur? What makes this business idea different than anything these investors have seen in the past?
- Practice speaking (but not too much). In some ways, there's no such thing as “too much” practice. The more time you spend with your presentation material, the more confident you'll feel with it and the better you'll likely perform on presentation day. However, it's important to avoid practicing in such a rigid way that you end up sounding like a robot. It's important to maintain some degree of flexibility and expressiveness in your presentation.
- Acknowledge weaknesses, risks, and downsides. Too often, startup entrepreneurs focus only on the incredible, unbelievable, amazing potential of their business, hoping to brush the weaknesses, risks, and downsides under the rug. But investors aren't usually impressed by this; they know that every business has weaknesses and downsides, and they want to see that you both acknowledge this and have a plan for it. Address the weaknesses and downsides of your business head on.
- Be ready to answer the hard questions. Finally, be ready to answer some hard questions. Investors are typically wise with their money, and they aren't going to trust you with a massive sum of capital unless you can prove that you're capable of using it effectively. Prepare to be asked the hardest, most aggressive questions you can imagine; any questioning session less aggressive than this should become a cakewalk. If you demonstrate that you've anticipated most of their questions already, you'll make an even better impression.
Nailing the Fundamentals
It's true that much of your success depends on your ability to find the right investors, charm them, and make a good impression with your presentation skills. But it's even more important to nail the fundamentals. If you have a truly novel business idea with ample potential, the presentation is something of a formality.
Accordingly, you should dedicate as much time as necessary to making sure your core business model is as attractive as possible.