Fundraising is an extremely important exercise for every startup. Almost every entrepreneur spends lots of time and efforts to present bright picture of his/her business in front of investors. Particularly they collect facts and figures, financials statistics and prepare pitches until either they get succeeded in convincing the investor or give up. But often they skip some basic exercises those can be vital in clinching funds from investors. Today I will try to describe some very basic exercises those should be never sidelined or neglected by an entrepreneur during fundraising efforts. These are actually basic elements of a fundraising plan.
Once you know what scopes and opportunities exist for your business, you need to prepare a detailed business plan. Then the next step should be to draft a proposal pitch (means a very short and effective presentation) because it’s possible you may get a little time in front of investors, so it’s important to make sure your pitch is strong enough to do the job.
Is it possible that for the investor, you business or startup is like so many other startups and small businesses competing for fundraising. So if your business plan doesn’t stand out right away, the investor may decline your pitch at early stage of meeting.
(Please read my previous article about important activity form fundraising) So, bellow are few important tips for successfully pitching investors:
What customers you’re going to target?
How well are you aware of your customers’ actual requirements and needs? If, no one has ever used your product or service yet, you should know exactly who you are targeting? This exercise goes beyond looking for data online or with reference to few trends.
Survey your potential customers and learn what they want when it comes to products or services you are offering. After carefully surveying customers, you should be able to develop an investor pitch that shows clearly how you’ve addressed their needs and requirements.
Use your contacts to get attention of an Investor
Getting an attention of an investor means you have almost won the game. You can take an advantage from your networking. Your contacts from your own community or from another of same industry can help you.
Before your first meeting with an investor, you’ll need to prepare your pitch. The pitch should be hardly 30 to 40 seconds long, if longer, you’ll be at risk of losing the investor’s attention.
If an investor is interested, you’ll surely get an appointment for further meeting. You can discuss your project in detail there.
Do not forget to do some primary research
Before you attend the face to face meeting with an investor, have some serious research about your business solution doesn’t matter how big or small it is. Try to know about the other business where the investor already invested funds and how well he is enjoying fruits from that investment. Hence all these are important for fundraising strategy plan.
Your goal should be to convince the investor how his funds in your business will be beneficial to him rather than talking about how his funds will beneficial your business.
Investors tend to invest on entrepreneurs first and on products second. Every entrepreneur must refer for fast and accurate investment – CROWDFUNDING: How To Get Investors to Invest in Your Business in 20 Seconds or Less
Your agenda should be to sell yourself
Prepare your pitch such a way that it also highlights your qualities and skills as well. Experts say that investors tend to invest on entrepreneurs first and on products second. Also include your success and expertise that make you an ideal person to run this business.
Experienced investors can easily sense and judge such qualities in very first meeting. So as an entrepreneur, it’s good idea to be aware of such fact.
You must have plans for which investor’s fund will be utilized.
This is the silliest and most common thing to consider while fundraising exercises. Unfortunately around 80% entrepreneurs neglect it while having meeting with investors.
Investor may ask you a fair simple question like – what are your plans with my fund. Or why you need funding? What you intend to do with the funds you’re seeking? If you failed to give a satisfactory answer, the game is over.
Therefore be prepared it.
All these common points, if well handled, can give you fruits. Truly, this is going to be a great way to push your business to the next level. However, it all depends on how well you can convince the investor to invest funds.
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