Developing a concept for your business is an important first step, but it’s only a first step.
What’s a great idea if you haven’t got the financial backing to make it a reality? Unless you’ve got vast reserves of capital – or are prepared to startextremely lean – your business will need investment to get off the ground and/or grow.
And to get investment, you’ll most likely need to pitch for it.
In some respects, this can be the most difficult part of starting a business. To come up with a great idea for a company requires unusual foresight, which is, by definition, rare. And convincing other people that you’ve not only thought of something worthwhile, but created a viable business model for it, is a considerable task.
So how do you prepare?
Here are five tips for crafting an irresistible pitch.
Naturally, the first step is to confirm that your terrific idea is, in fact, a terrific idea. Help them understand why the world will be better for having your idea brought to life.
This is the single most important piece of information you have to offer in your pitch. Investors are naturally sceptical, and will consider reasons not to give you money as seriously as reasons to do so. If you can’t explain it simply, chances are, investors will be put off.
Don’t start your pitch with a deep-dive into the detail. What matters is why your target market needs this product. Why will it work? What does it do? What, in the end, is it for?
Show them your vision; lay out your strategic rationale, and communicate it clearly. They won’t believe that your company needs to exist unless you believe it first.
It’s perfectly understandable to be excited about your company. But don’t let your excitement get in the way of the essential details.
Your pitch needs to demonstrate creativity, for sure, but it also needs to show discipline. Innovation and eccentric brilliance are all well and good, but investors need the confidence to believe that you can manage time and money effectively.
But balance is important. A sprawling, 500-slide epic detailing the inner workings of every conceivable offshoot of your main offering is unlikely to attract much interest.
Show that you know how to prioritise the things that matter and your pitch will stand a better chance.
In all this talk of product, it’s worth remembering that they’re investing in you as much as your offering. If the initial version of your business model isn’t working, you need to show a willingness to change direction and try something new – and ideally, you’ll have these contingencies baked into your pitch.
This doesn’t mean anticipating the failure of your original idea. But showing your prospective investors that you’re prepared to pivot demonstrates adaptability and intelligence. More than that, it shows that you won’t stubbornly continue down a rabbit hole when there are other paths available. Perseverance is important, but only when you’re on the right track. Acknowledging that you might not be matters more than you might think.
An easy way to communicate the viability of your project is to show potential investors that it works. Get a live product out as early as possible: having end-users on board immediately shows that it does have at least a basic level of appeal, and work to improve it constantly with live data and feedback. It’s much easier for investors to get behind a prototype than a set of blueprints.
Monitor its popularity: if you have something to show on this front, you’ll make an impression – and if you don’t, outline how investment will help you get there.
End users are the most important. If you don’t have them on board then what’s the point?
Bring your team
Finally, bring the right team with you. Unless your microbusiness is especially ‘micro’, you’ll have one – so show them off. Your crack squad will build your company alongside you, and it’s no use pretending otherwise. Involve them in the pitch.
Being able to attract the right skills and personalities reflects well on you, and if you don’t form instant rapport with your prospective investor, another member of your team might. Besides which, they like to know who they’ll be working with.
Beyond the above five tips, mastering your pitch is a matter of doing the research, acquiring the data, and practicing until you’re bored – before practicing some more. Think through the above points and rehearse them to the point where you can recite them from memory. It’s a general rule of thumb that a prepared entrepreneur is a successful entrepreneur. This applies to every stage of the launch process, but the pitch in particular. Get it right, and you’ll get the investment you need to get your company off the ground.
By James Oakes, Director, ZEAL Investments