Being the lead entrepreneur or founder of an exciting start up, chances are, you’re planning the funding stages you’ll have to conduct in order to get your business started on its high growth trajectory.
At some point in the early stages of your business' life – “when” depends on how long you choose to self-fund or bootstrap - you will need to raise seed capital. How you choose to do this is completely up to you and there are a number of options out there: angel investors, VCs, and equity crowdfunding platforms are just three examples.
Now, whilst GrowthFunders is an online platform, we are big advocates of raising capital via these other sources too. It is vital when carrying out an online fund raise, that you also prepare yourself to pitch offline, because there may be times when an investor will want to invest a large sum of money, but will stipulate that you have to deliver a face-to-face pitch to them. Approaching angels, angel networks, VCs, and the crowd (via a platform) aren't necessarily separate methods of raising money; rather they can complement one another as you can pitch both on and offline and then co-ordinate the fundraise online.
There are a number of skills you will need to put into practise when pitching to investors. For example, the design and styling of your slide deck, your presentation and communication style, and the level of detail you include in the information you deliver. If pitching to investors isn’t something you've done before or you've only done it once or twice, you might be looking for some guidance when it comes to polishing up your presenting skills.
Well, just for you, we’ve brought together 8 articles written by people who’ve been on both sides of the pitching process – below, you’ll find some expert advice from professional angels, a Dragon, as well as someone who successfully pitched to the Dragons, amongst others.
8 experts teach you how to pitch to investors
Caroline Cummings (co-founder and CEO of OsoEco + RealLead) reminds us that pitches usually have a time limit attached to them, but that this isn't something to worry about. You can cover all of the key points investors want to hear in a 10 minute pitch and all extra information can be (and should be) included in your business plan and other supporting documentation. As Caroline Cummings says, "The intention, after all, is that you deliver a powerful pitch, and their hands are out asking for either your executive summary or your complete business plan."
Richard Harroch (MD + Global head for Vantage Point Capital Partners) wants start up owners to know that investors do not have the time to spend listening to "terrible" presentations given by "inexperienced" entrepreneurs. However, just because you've never pitched before, doesn't mean you'll do a bad job, especially if you take a look at this list Richard Harroch has compiled, based on his experiences.
These are the top 5 points that stood out for me because I hear them time and again when speaking to investors:
- Not showing the size of the market opportunity - include evidence to show the high growth potential of your business.
- Not explaining the problem your business solves - if no problem exists, there's no need for your business.
- Saying your business doesn't have any competition - every single business has competition, either direct or indirect.
- Forgetting to highlight your team's experience - investors want to see the team around you. They would rather invest in an A grade team with a B grade idea than the other way around.
- Not explaining your product or service well enough - if the investor doesn't understand what you do, they probably won't be able to fully comprehend the high growth potential of your business. You need to make sure they understand.
Which of Richard's "common entrepreneur mistakes" stood out for you? Leave us a comment below and let us know.
Whilst "Dragon", James Caan, also highlights the importance of introducing your team, giving evidence of the demand in the marketplace for the solution your business provides, and producing realistic financials, he also stresses the importance of attention to detail. For James, your actual pitch is only part of the story - making a good impression by dressing appropriately for your audience and displaying confidence through eye contact are just as important. But there's a reason for that' as he says, "These may seem like minor things but they tell me that you don’t pay enough attention to detail – and if I’m backing you to run a business, that’s not a trait I look for."
Spencer Waldron (presentation expert and UK Country Manager at Prezi) is all about investing time, energy, and effort into your presentation. The more time you take to plan, write, design, and deliver your pitch, the more chance of success you will have. This post is fantastic as it walks you through the whole process from doing your research to actually designing your accompanying presentation slides. Spencer has even put together a suggested presentation structure and template.
Did you find that this structure works for you? If so, great! If not, why not? Let us know below.
It's common knowledge that not every investor is looking for the same thing, and to test this theory, the BBC’s business reporter, Ian Rose asked the same three questions to three experienced entrepreneurs who've made the transition into influential investor:
- What are you looking for?
- What are your red flags?
- What's the best way to make an approach?
Whilst answers for the first two questions varied, interestingly, all three investors say they only consider businesses that have been recommended to them. This is a great tip as it highlights just how important networking is and concentrating on making the right connections, both online and off.
Whilst we know that not everyone has what it takes to be an entrepreneur, being entrepreneurially-minded alone isn't enough to help you when pitching to investors. You also need to have some commercial logic, understand - and be able to express that you understand - what running a business actually entails. Other tips include ditching the jargon because it doesn't necessarily make you look like you know what you're talking about and don't try to bluff your way through the presentation.
After successfully winning investment from the Dragons' Den, here entrepreneur Jennifer Duthie, shares the pitching tips which helped her attract seed capital from Piers Linney and Kelly Hoppen. The founder of Skribbies encourages you to know both your audience and your figures really well, as well as valuing your company sensibly, and having an exit strategy in place.
Hassle.com co-founder + CEO, Alex Depledge focuses on the idea that "anyone can do it" when it comes to pitching to investors, despite the fact that no one teaches the specifics of how to present investment pitches at university, it's something you need to learn yourself as you go along your entrepreneurial journey. This articles offers a great insight into presenting to investors from the entrepreneur's point of view which is invaluable advice.
Most of the angel investors you'll find yourself pitching to will have been in your shoes (as the founder of a start up raising seed capital for their business) at some point - they really do know what they're talking about, so it's worth taking their advice on board.
Which article did you find most useful? Do you feel inspired to deliver a top-notch investor pitch now? Let us know in the comment section below.