Pitching to investors for investment in your start-up business

4 Feb

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Are you thinking of going on Dragons’ Den, or pitching to venture capitalists or other investors to get some much needed cash for your next business venture? Well this guide has all the answers. This handy guide for entrepreneurs will give you insight into what investors expect when you pitch for investment and how to pitch professionally.

Most important message in the first 30 seconds

One of the most important things you need to understand about investors is: they are human, and like all humans they can get bored. Beware triggering boredom in investors. You want them to listen and be engaged for the whole pitch, not listen to the first few seconds and then doze off. Remember that the first 30 seconds of your pitch are the most important 30 seconds in the whole pitch. This is the short, fleeting timeframe when you are the most likely to have the full attention of your audience. To give a professional pitch, fill this 30 seconds with sharp and concise messages.

The ‘truth’!

Tell the truth about your venture’s pitfalls or past mistakes, and be direct about gaps in your experience or knowledge. If you’ve had a financial emergency and have had to get business funding from providers like www.wongaforbusiness, for example, this won’t go against you if you give the reasons why and show why the finance was beneficial. You are not expected to be perfect but if an investor sniffs out a ‘porky pie’ in your story, they will be less likely to trust you with their cash.

Tell a story

Go ‘back to basics’ and tell your story in the most simple way possible. Tell your audience who you are, what you want and why investment is a good idea.

No ‘hard sell’

Be direct and factual. Don’t give investors the ‘hard sell’, or a lot of fluffy language. Instead give facts and figures and try to quantify the growth you would expect on the investment sought and the predicted timeframe for this growth. Give reasons for your expectations.

Tools

You can use communication tools like a powerpoint presentation to help you get your message across. Again, keep your presentation concise and to the point.

Use large font on your slides, if you prepare a powerpoint presentation because the text should be legible from a  distance of about 10 feet.

Don’t ‘overcrowd’ your slides with too much information. You should be very selective about the information you include on a slide.

Avoid jargon

Investors have lots of cash, but this does not mean they know everything. You need to tell investors about your business venture in the most simple and concise way possible. You should avoid technical terms as much as possible and if you do use a technical term, be sure to give a simple explanation of it before you continue.

Round up financial figures

Make financials easy to understand by rounding them up or down and including a note somewhere that the figures are approximate. Investors don’t expect you to get your projections correct to the 10th decimal place, and a decimal point can be very hard to see from a distance of a few feet, which is where your audience is likely to be!

3 Responses to “Pitching to investors for investment in your start-up business”

  1. Harvey July 29, 2013 at 5:54 am #

    First of all, I would like to thank you for your time to read my question. I hope I can get some assistance with this.

    I would like to start a business with another person. This person won’t pitch in any money since he’s contributing with the idea. I will cover 100% of the financial means to start up this business. We both will work on it. So my question is, how much percentage of a profit will be fair for this person? Is there any place I can research this type of information?

    Thank you in advance for any input you can provide.

  2. Voncile August 26, 2013 at 10:11 am #

    I want to start up my own business and I even have a business plan and how much will be needed.
    It’s really just a small investment as I am looking for about 5 to 10 G’s.
    I am investing in myself as a product and talent.

  3. Pierre September 12, 2013 at 9:10 am #

    I’m trying to reach out to any VC’s of Angels in my network, however I am not making much ground. Am I hoping to find someone with experience to answer a few questions for me regarding my specific start-up, ie when to reach out to secure funding, putting together management teams, etc. If you are willing to answer some questions for me please respond to this question and I will message you directly, or send me a message at Ken_harman@yahoo.com.
    Thank you.

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