Forget management and product development; attracting investors and convincing them that your small business is a worthy gamble may be the most important skill for an entrepreneur. Without investors, there is often not sufficient capital for starting your business on the right foot or financing crucial expansions. If you have trouble making an irresistible pitch to potential investors, here are five tips to hone your hooking skills.
Keep it simple. One classic first-timer mistake when it comes to pitching investors is filling your media with frills. While it’s important that you be perceived as a professional, fancy pictures aren’t going to achieve that. Keep it simple and fill your presentation and materials with just the facts. Once your potential investors grasp the basic concepts, you can fill in the details as needed.
Keep it real. While it’s tempting to share your winning vision of the future with your investors, they aren’t looking for a fantasy. They want reality—based on prior evidence, how likely are they to get their investment back and then some? Along the same line, show them all of the possible projections for your company, the best case along with the worst case scenarios. No one is impressed by inflated projections; they are impressed by a solid previous performance in a market with a track record of success.
Keep it cheap. Everyone is feeling cheap in this economy, and investors are no exception. Don’t try to convince investors to pay for top of the line materials and extra perks, especially where these materials have no effect on the product or the customer experience. Nice furniture and paid vacations can come later; build your projected budget by adding just a little wiggle room to the most bare-bones operation you can succeed with.
Start small. The one thing most likely to convince an investor not to give you money is to give him or her the impression that you are getting in over your head. Don’t ask for millions of dollars to finance a small start up company, and don’t jump into a complex product line before you have one product selling well. Start small, prove yourself, and then ask for the funding that you need to expand. Investors like to put their money into small businesses that show slow, sustainable growth.
Ask the experts. Sometimes the true strength of a business is the caliber of people manning it. If you have an employee who is an expert in the field, or even a consultant with a great track record, investors are going to feel a lot more confident in your management of their money. Smart people know to surround themselves with smarter people.
When it comes to winning over investors, it isn’t so much what you say or how you say it. On the contrary, both of these elements are equally important. If your presentation has the right mixture of solid facts and professional polish, it is sure to win the funding that you need to begin the business of your dreams.






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