It is quite obvious that any business venture can access only a very limited amount of funds at the time of its formation. According to https://smallbiztrends.com,82% of a startup, funds come from the savings of the founder, family, and friends; thus, the hunt for funds can start very early on indeed in the life of the venture.
Not getting the pitch right can be a severe setback to the chances of getting the startup off to a fast and profitable start. Some tips from entrepreneurs who have successfully faced the heat:
Explain Your Business Model
When the founders of a startup make a pitch for funds to investors, they often get carried away by the concept so much that they invariably forget that at the end of the day, businesses have to make commercial sense.
As demotivating as it may sound, investors couldn’t care less about ideas and dreams, they are only interested in business models that are proven and better still ones that have demonstrated traction and revenue generation capabilities.
As an entrepreneur, you have to be realistic and appreciate the fact that the investors are in the game only for returns. This means that when entrepreneurs are pitching, they need to show very clearly and convincingly what the returns are.
Know Who You Are Pitching To
It is extremely important for the startup founders to know who they will be pitching to before the meeting so that they can customize the presentation to a certain extent for better impact. For example, if your startup is in the education sector, and your research shows that the investors have children, you can tailor your pitch to address the pain points that parents typically experience as it is likely that it will resonate more with the investors.
Similarly, if your venture is delivering a solution to detect cancer early and your investor panel has a member who’s perhaps lost a close family member or a loved one to the disease, a strong pitch demonstrating how your company will bring succor to people who are suffering from cancer can tilt the balance in your favor.
Investors hear so many business pitches that they have often become inured to commercial arguments but if you can make it pertinent to their personal experiences, it may just find favor.
Keep Your Focus on Continuous Improvement
Getting funds for your venture is not the easiest of tasks and maybe you will need to keep plugging at it for quite some time. Even though you may tend to get disheartened by repeated failures, you should not lose focus on what you originally set out to do.
Focusing on developing both the business idea and your domain expertise can get you noticed sooner or later and you may find investors more amenable to supporting you with the funds at the point in time. Often, entrepreneurs make the mistake of approaching investors while they in the ideation stage but waiting for the idea and the business to mature a little can pay you dividends at the right time when investors have begun to hear a buzz about you.
Deep Detailed and Accurate Business Records
Even though things can get really bad in the initial stages of the operation of the startup because you are trying to do many things at the same time, you should make it a point to keep business records meticulously so that investors are convinced that they are dealing with a person who not only has integrity but is also careful about using the money.
It helps to convince investors that you are serious about your business and not the type who will dress up the accounts even though the company is making a loss. Investors or even online lenders like libertylending.com will only put their money down if they are convinced that the business is being run honestly.
Be Sure to Ask for Help
Becoming an entrepreneur should not be something that you are doing all by yourself. In the initial stages and even for some time after, the going can be really tough and the situation desperate. When you are strapped for something, you should be afraid to just ask for help from your friends, relatives, and even acquaintance.
Sometimes, you may find help coming from the most unexpected corners. The truth is unless you ask for help, it is pretty sure you will not get any even though it may be obvious to all.
Network with a Purpose
There are many owners of startups who are naturally very shy and find it difficult to network because they think people will take them to be self-serving. You have to bear in mind that strong relationships can often be formed by networking.
Through networking, you can share your business vision and the changes that you want to bring about in society, for example. Often these discussions find resonance with other people in the network and the shared vision can often gather momentum and offer opportunities that did not exist before.
When you share something beyond just money with your potential investors, it can translate into something productive down the line and pave the way for success even though you may not have exactly planned for it.
Appreciate Those Who Pitch into Help
Often small business ventures are kicked off by entrepreneurs more out of a leap of faith than solid financial projections. In these early days, it can be obviously very difficult in getting support, monetary or in kind. The people who support you at this time are usually family, friends, relatives, and if you are really lucky, some clients.
Remember to acknowledge every little contribution that comes your way because if it were not for these small encouragements, your business venture might not even survive to see the days of high valuations and successful IPOs.
It is important to make humility and adaptability your strength. Nobody, least of all investors, likes an arrogant know-it-all, and funding for such people can be really elusive. Investors know that the entrepreneur does not have long experience; however, if the idea is good, there is a potential market, and the passion to make it work shines through, it can make investors put their money down in your favor.