Your ability to deliver a presentation in a clear, concise and convincing manner is vital to convince an investor to part with his or her money.
SmallBusiness.co.uk and Alan Gleeson, managing director of Palo Alto Software UK, have developed the following list of tips to maximise your chances of success when pitching to investors:
Know your audience – It is necessary to understand the backgrounds of the prospective investors and their motivations before approaching them. With the help of the internet, conduct extensive research on your potential investors so that you can tailor your pitch to them and, where possible, engage with them on a personal level.
Tell a Story – Ideally, your story will focus on a problem that you and others have encountered and the fact that your idea solves this particular problem. If the investors can relate to the problem, they are more likely to invest in your business as long as your idea can provide a solution profitably and it is defensible (via patents, trade marks, etc).
Preparation is key – All too often, entrepreneurs do not plan for investor presentations sufficiently and find that their business pitch suffers. Start getting ready for investor pitches as soon as the business plan process starts.
Pay strict attention to the detail – Your typical investor will have a good eye for detail so your plan and its pitch need to be mutually reinforcing and contain no contradictions. Try to have one person oversee the whole process who is ultimately responsible for the content. This is particularly important if a number of disparate contributors have worked on the plan.
Avoid death by presentation software – Most business plans are produced with the help of presentation software and while it undoubtedly has advantages in terms of aesthetics, it can be misused. The number of slides should be kept to a minimum, the content must be rigorously analysed to ensure relevance and clarity and time must be managed carefully.
Get the numbers right – Investors tend to be very focused on numbers so all facts must be accurate. The numbers should be realistic and defensible, and at least one of those people who are pitching the plan should to be prepared for in-depth questions relating to the projected financials.
If you have been trading already and under-performing, you will need to articulate clearly why this has been the case and also elaborate on why investment will solve the performance gap.
Practice the presentation – A dry run should be arranged well in advance of the presentation date to make sure that you are comfortable going through the key points.
Excite them – Investors deal with hundreds of business plans every month. Show them why they would be better off investing in your business rather than leaving money in a bank account or investing in another business.