The world of funding for small businesses is a cutthroat environment. Just getting yourself in a room with a potential investor can take a lot of hard work and sometimes more than a bit of luck. If you’re lucky enough to get face to face with the right investor for your business, you want to make sure you make the most of this precious opportunity. Even if your idea is great, it’s frightening how easily those minutes can slip by without getting your idea across effectively. As a general rule, investors will fund approximately 1 out of 100 ventures they are presented with. To be that one, you have to beat out 99 others. These tips will help you avoid some of the most common pitfalls many entrepreneurs encounter in these sought-after minutes.
- Running Overtime
Anyone who has pitched to investors knows that there is a risk of your high-powered audience becoming impatient, or even cutting you short if your pitch is too long. Time is money, and one of the key ways to demonstrate that you understand business is by showing respect for your investor’s time and planning your presentation down to the minute. A short presentation means your content will be memorable, which helps your chances of creating a lasting impression. Take these pointers into account when planning, rehearsing and delivering your pitch. Be true to your word. Don’t take fifteen minutes if you’ve told the investors that you only need ten minutes of their time. A good rule of thumb is to take one minute less than stated if you are the one who has proposed a timeframe, and up to five minutes less if you have been allotted a window of time by the investor. This unrushed approach fosters an atmosphere of ease and calm, which can be very reassuring to potential investors. Slides can be a real pitfall here. Avoid spending more than a few minutes per slide, as there’s nothing worse than having to rush through endless slides when your time is running out. Another good tip is to avoid inserting extra comments on the spot, as even a short statement here and there will add to your time. Rather, stick to your plan, speak at a good pace, and make sure you save enough time to round things off at the end. If you’ve used your time well, you will have piqued the investors’ interest. When they have follow up questions, don’t let your time-conscious habits go out the window. Remember you’re still on the clock.
- Straying from the Essentials
To ensure that you keep to a time limit, make sure you distill your ideas down to the essentials. Avoid any detail that is not relevant to your product, your target customer, or your strategy. Be brief but exact as you outline your product. While your product might be your pride and joy, investors probably won’t share your enthusiasm for the product itself, so don’t wax lyrical about every little feature. What they care about is the money they stand to make. The way to assure them of the profits in store if they decide to invest is to show them what makes your product novel and necessary in the current market. And if your product is not unique, don’t even bother with that meeting. Get your thinking cap on and come up with something nobody has thought of before. When it comes to discussing your target audience, make sure you support your customer profile with demographic data. Once you’ve defined your target audience, give the investor a clear idea of how you are going to acquire and convert leads. A realistic but innovative digital marketing strategy is absolutely essential. Show the investor that you have a clear plan of action for getting your product to market.
- Rough Edges
When you’re preparing for a potentially life-changing meeting, it can be tempting to devote all your energy to preparing what you are going to say. While the substance of your ideas is the most important thing, don’t underestimate the smaller cues that communicate important information about you to the investor. You want to come across as reliable and trustworthy, while at the same time seeming innovative and forward-thinking. Arrive bang on time. Master your eye contact and handshake. Make sure your laptop is fully charged. Take care to dress well. Deciding what to wear might seem like a minefield, but a good rule of thumb is to dress for the role you deserve. That means dressing like someone who has been granted funding and is running a successful business, so skimping on your business attire is not a good look. And if you’re using a presentation aid, Powerpoint 2004 is not going to cut it. Use state of the art technology to lend your pitch a modern feel and show your potential investors that you’re ready to embrace the future. Not only will you spend less time building presentations with Beautiful.AI but you will strike a modern note. And finally, practice makes perfect. Rehearse your pitch again and again, beyond the point when you feel confident. And remember, it’s always harder under match conditions. To pull off the pitch of your career, you need to be able to think on your feet and dodge curve balls from every direction.
- The Devil is in The Details
When pitching to investors it’s important to bear in mind that they are not interested in broad generalisations, and they will want you to back up every key statement you make with relevant data. Don’t give in to the temptation of making general statements to exaggerate the importance of your product or downplay the role of competitors. Your investors will dismiss you out of hand when you don’t demonstrate that you know your stuff. What impresses investors is realism in terms of what’s out there on the market, and evidence that you have done your homework. If you can’t defend your predictions with hard facts, your big idea is going to seem flimsy.
- Overconfidence
While it’s important to be a confident ambassador for your product, arrogance will get you nowhere with investors. Overconfidence can come across as a lack of understanding of the market, an inability to anticipate challenges, and unrealistic expectations of what it’s going to take to be successful. And don’t assume that the people you’re pitching to don’t know what you’re talking about. You’d be surprised how many investors have work or research backgrounds in the niche they are investing in, so a tone of condescension is not going down well.
Whether you’re an experienced veteran or this is your first time pitching to investors, avoiding these common mistakes will maximise your chances of being that one out of a hundred businesses that get the chance to prove their worth.
