What Investors Want (or how to get the cash)

Last month we provided info on all the various ways to get investment funds for business growthand bright ideas

Usually you will only get one crack at presenting your idea to a potential investor so you want to make sure you get it right the first time.

Here are the top 8 things investors need to see in your pitch:

What is the problem you are solving?
Investors have seen too many ideas that turn out to be solutions to problems that don’t exist.  Make sure you can articulate the problem you are solving and have some measure of the extent to which the problem exists.

How does your solution work?
Investors love a demo (especially one that works).  If possible use live product demos, screenshots, videos, etc.  Whether a live demo or Powerpoint presentation you must let investors see how your product is going to solve a problem and make people happy.

How big is your market?
Investors need to understand the potential size of your business – obviously bigger is usually better.  You can use a top down approach, quoting market data from ABS or Gartner.  But we suggest that you support this with a bottom up  approach where you look at the number of users, size of transaction, frequency, etc to build up to a total potential market size.

What is your business model?
In the most basic terms, your business model describes the way you will make money.  So naturally an investor is very interested!  Will you be an online business, bricks and mortar, bricks and clicks, a franchise, a value added reseller?  Be prepared to discuss models that you have dismissed so that investors can see that you have thought through all the options.

How are you better than everyone else?
Investors don’t like risk.  Demonstrating that you have major advantages will make them more comfortable.  So talk about your biggest assets.  These might be intellectual property, patents, your team, your existing customers or revenue.

List your competitors in your pitch and be able to demonstrate how your product or service is better.  If you aren’t better then reframe the context.  Perhaps your widget is not the best solution for all customers, but it is the best for left handed women over 60.  Just make sure you have allowed for this when estimating your market size.

How are going to get the message out there?
A great product is not much good if no one knows about it, so investors will need to see a carefully crafted marketing plan.  When framing this for an investor it’s a good idea to speak in terms of volume, cost and conversion.  In other words how many customers do you need, at what cost and what conversion rate in order to be able to achieve your revenue target.

Who’s going to run the show?
Many investors will tell you that they invest in people as much as they invest in ideas, perhaps more.  An investor wants to know who’s on the team that will be delivering the business idea.  Demonstrate that your team has the skills and experience to not only deliver the product or service, but to manage the business.

What are you going to do with the money?
Before stumping up the cash, an investor is going to want a clear idea of how that money is going to be spent.  Is the money going into overheads, to pay for additional staff or to acquire new customers?  Be sure you can articulate how the investment dollars will be spent and how this is going to deliver a return.

DOES THIS SOUND TOO SIMPLE?

If you are reading this list and thinking to yourself, “This sounds easier than it really is” then you are right!  Pulling together the information required and thinking through your strategy and plans is going to be a time consuming, often difficult exercise.  Don’t fool yourself that it is not.

BUT when you get in front of the investors you need to make it SOUND simple.  You need to be able to articulate the basic premise of your business in less than 60 seconds in a way that will make a busy investor remember you and want to talk further.  This is often referred to as the Elevator Pitch.

When you actually get in front of investors you will be lucky to be granted 30 minutes to present your idea.  So you need a succinct “executive summary” that clearly explains your business plan and at the same time be prepared to answer detailed questions.

We are here to help our customers grow and prosper!  So of course, we are happy to help in securing the funds you need to achieve growth.  Please give us a call if we can help you with the numbers, strategy or investor presentation.

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