https://innovateuk.blog.gov.uk/2016/02/29/essential-business-tips-for-pitching-to-investors/

Essential business tips for pitching to investors

We recently brought you our video with 5 essential tips to secure funding for start-ups and small businesses.

The second instalment in our ‘Essential business tips’ series looks at one of the most important aspects when trying to raise funding – the dreaded pitch.

Tip 1 – Target the right investor for you

Tip 1 – Target the right investor for you

Starting and running a business takes time and resources. It’s vital you are organised and prioritise what needs to be done.

In the case of funding, approaching every potential investor you connect with wastes time. Most start-ups have to pitch to many investors before securing the funds they need. You don’t want to be wasting time on someone whose investment isn’t relevant.

We recommend you target those who’ll help you succeed. This isn’t always looking for who has the deepest pockets.

David Benigson, CEO and Founder of Signal advises:

Look for investors who add value beyond cash and are aligned with your long term goals.

There are ways to find investors such as Angel List. This resource brings together investors and businesses allowing both parties to find out more.

What you should look for in an investor

  • Are they active and well connected in your sector? Investors may have a network within your sector you can take advantage of. This could create business opportunities that would take you months to find without their hel
  • Do they invest at the stage your business is at? For example, Venture Capital investors often won’t consider investments below £1 million and angels invest smaller amounts often below £50,000.
  • Do they offer the type of investment you require? For example, you may want a loan, but they may only deal in equity.
  • Do they have a track record and relevant portfolio? If an investor has no experience of investing or operating in your sector, is their advice valid?

Tip 2 – Prepare an engaging deck

Tip 2 – Prepare an engaging deck

You should have a high quality presentation, based on a good business plan and detailed financial projections (learn more on producing credible figures in our Essential funding tip video).

We recommend no more than 8-10 slides and it’s a good idea to accompany it with a 2-3 page summary.

Your proposal should be visually stimulating; use charts and images to bring your presentation to life and make sure it’s not too wordy.

Think of it as a trailer for a movie that entices its audience.

Time will be short, so focus on these critical points:

  • value proposition
  • the problem
  • target market
  • the solution
  • competition
  • revenue model
  • go-to-market strategy
  • team
  • financials
  • use of funds

Patrick Sheehan, Founder and Partner of the Environmental Technologies Fund adds:

Be clear what problem you are solving and for whom.

This may seem obvious to you as it’s your business, but it is important you spell it out and be as specific as possible.

A good investor will want to know more if they are interested. Your pitch will be closely examined, so get ready for tough questions and prepare your answers.

Tip 3 - Sell the upside…and yourself

Tip 3 - Sell the upside…and yourself

Your presentation will tell the story, but you still have work to do. Focus on selling the quick exit or potential returns and getting people excited about your ability to make it happen.

Investors are looking for business opportunities that are disruptive, scalable, have huge benefits and potential. It’s your job to make them believe you can deliver.

Philip Lelliot, Director at Bladon Jets states:

All great plans need to be delivered, and that means you and your team!

An enthusiastic delivery, especially under pressure, shows your determination to succeed. Remember, chemistry and personality can be important for investors too. Above all you need to believe in what you are pitching.

Hilary Davey, CEO and Chairman of the Pall-Ex Group says:

If you don’t have faith in yourself, then nobody else will have faith in you.

It can be nerve racking so make sure you’re pitch perfect. Here’s more video tips on how to prepare a pitch for investors, partners or customers, covering what makes a good pitch, how to begin a pitch, how to talk about your product and more.

Tip 4 – Follow up after your pitch

Tip 4 – Follow up after your pitch

Immediately follow-up on promised actions after the pitch – including sending any relevant documents.

Update potential investors on your progress and let them know about any events or big wins.

You can also keep in touch using social media such as posting updates on LinkedIn

Philip Lelliot states:

Follow-up is another opportunity to sell yourself. It shows you mean business.

Don’t assume just because you haven’t heard from them that they aren’t interested. Remember that raising investment takes time, so you must plan your business finances accordingly. Even a great proposition and well-researched business plan, face delays. Make sure you and your business can survive until funding is secured.

If your pitch fails, often you will receive feedback. Revise your presentation based on the questions and feedback you receive. This will make sure that every pitch is better than the last.

Watch more essential funding tips.

You can follow Innovate UK on:

Leave a comment