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How to Pitch Your Business to Investors
  • 26 July 2017
  • Daniel Vahab

How to Pitch Your Business to Investors

Nowadays, it is more important than ever before that you know how to pitch your business to investors. After all, a new revolution brought on by shows like "Shark Tank" and “The Profit” with Marcus Lemonis have set up a market landscape in which there are booming numbers of financial backers and entrepreneurs entering the workforce on a regular basis. As capital is essential to business growth, you need to know how to stand out from the crowd to earn the necessary financial backing. Even if you have a great product or service, you will not succeed unless you have the opportunity to produce and market your offerings properly. Here are five tips on how to pitch your business.

1. How to create an elevator pitch

In order to get your message across to investors in a quick and efficient way, you must be able to communicate your unique value propositions and angles in a limited amount of words. When developing your elevator pitch, you should focus on the specific need you are fulfilling through your offerings. You may have just one opportunity to sell your business concept, so it is critical to craft a compelling one the first time. If you want tips from a pro, watch The UPS Store Elevator Pitch with Marcus Lemonis.

A good way to perfect your pitch is by practicing your pitch to people, getting their honest feedback, and testing out different versions to see what gets the best reactions. It can also be helpful to try to think in reverse: If you were the investor, would you be engaged in this pitch right away? Would you understand the specific offerings and how they differ from those of other companies?

2. Showcase a track record of success

Overall, investors will feel more confident about a potential investment if they find that these projects, companies, and initiatives have delivered positive results in the past—especially if these successes have taken place in a similar marketplace. Be confident and have the numbers to back up your pitch.

As you are selling yourself—in addition to a product or service—you should strive to establish credibility in your marketplace, especially if this space is particularly competitive. Try to garner top-tier public relations placements, strong social media foundations, and speaking engagements to showcase your expertise and authority in the industry.

3. Research your market

As always, it is important to do your due diligence. There are lots of investors out there, and you must work to find the ones who would be most interested in your offerings and best-suited to fulfilling your specific needs. After all, a strategic investor can be just as valuable as capital itself—or perhaps even more valuable.

As a best practice, you should filter through the backers of similar companies that really took off. These individuals will be able to help you navigate the tricky waters by offering their invaluable advice, mentorship, and targeted contacts—all of which can help you overcome common hurdles.

Overall, you cannot expect funding to simply show up at your door. You must make a targeted list of your ideal partners and make a proactive effort to network with these individuals. You may also want to consider alternative options, such as pitching your business on crowd-sourced platforms like Kickstarter and Indiegogo.

4. Understand start-up lingo

When you are reaching out to financial backers, it is important that you know the necessary lingo and how it relates to your business. For instance, you should do research on term sheets and understand how much venture capital you are willing to give up. You should also verify that the potential backers are accredited investors.

Illustrate how you will bootstrap your business, and determine both your burn rate and churn rate. You should also come prepared for an investor meeting with your projected CPA and an explanation of the exit strategy you have developed.

5. Create a comprehensive business plan

When speaking to financial backers, it is also important for you to provide a detailed outline of your company with a business plan. Make sure to include basic information about your business, offerings, team, marketing plan, audience, and operations. Tell the story of your company's projected future by offering milestone goals tied to dates.

For support, you should include a realistic competitive and industry analysis. And make sure to conduct qualitative and quantitative surveys to offer real data to back up your projections. As investors will be interested in making a profit, you must paint an exciting picture of the financial potential that comes with backing your business.

Overall, it is clear that securing start-up revenue is essential to the success of your business. By following the above tips, you can be one step closer to finding the right financial partner.

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