Pitching your business plan can be a scary thing for a lot of founders and CEOs, especially when you don’t know what the investor is seeking. Each investor has their own “checklist” of items that they want to see in businesses before taking the next step with them. Therefore, it’s important to go into each meeting and presentation thoroughly prepared to address every question and concern that they may have.
Regardless of the type of investor that they may be - Angels, VCs, Banks or even friends and family - there’s a particular set of criteria that each of them wants to see. Read on to learn the six known secrets for pitching your business plan to investors to ensure a winning presentation, no matter how big or small your company size.
1. Exude Confidence When Presenting
Confidence is key when it comes to delivering any presentation - especially one that means money for your business. Present with impact by using these rules:
- Organise your thoughts, slides, and key points in advance.
- Clearly emphasise the most important “takeaways” about your business.
- Use eye contact with individual people whenever possible.
- Don’t read straight from note cards or slides, but instead use them as guides for speaking.
By incorporating these tactics, you’ll be more prepared and therefore better able to exude confidence when speaking in front of an audience of investors (or anyone for that matter).
2. Know Your Market Inside And Out
Investors want to know that you’ve done your homework. They’ll ask you questions about your target audience, competition, and especially, market share. The best way to approach calculating market share is by doing a bottom-up vs. a top-down marketing analysis. Why? Because in a top-down market analysis, you’re calculating the total market, then estimating your share of that market, which this is not what investors want to see - because that data is not significant. For example, just because 100,000 people are searching for a keyword that relates to your business, and 5% of those searches is 5,000, does not mean you’ll get 5,000 customers per month. It’s likely that not all of those people searching for that keyword are your target audience (or will buy), so the numbers, therefore, become insignificant.
3. Have A Clear Go-To-Market Strategy
Every business needs a concrete (but agile) marketing and sales strategy. Without it, you’re doomed to fail. Therefore, make sure that you have a clear go-to-market strategy that clearly demonstrates who you’re targeting, how you’re marketing to them, and what happens once they become a lead/prospect. Include well-researched and realistic goals based on internal and external data sources. Don’t just pull numbers out of the air! Instead, look at historical data from your marketing and sales reports, and project growth based on current and industry conversion benchmarks. Go into the pitch or meeting demonstrating exactly who your customer is, and how you’re going to reach them. Angel Investor and VC Board Member, Judy Robinett, tells the Washington Post, “There are only two reasons that a company fails, and number one is a lack of customer. I look to see how viable is this business opportunity.”
4. Stand Out From Your Competitors
“I want to be just like my competitors,” said no one - ever.” The best brands are those that are creative, have a unique voice and cleverly use marketing media, like video, to promote their business. For example, when in Dollar Shave Club’s first video, CEO Michael Dubin hired a comedian friend, Lucia Aniello, to help him produce the video which has gotten over 22 million views. In the video, they use smart copy and props to get laughs, all the while explicitly explaining what their product is and its value propositions. To date, they have over two million members and worth over $615 million. (That’s pretty impressive for a product whose pricing starts at only $1 per month.)
5. Be Realistic With Your Projections
At the end of the day, all investors care about is how they’re going to make money, and when. Therefore, the worst thing that you can do is tell them that they’ll get “X” return-on-investment by “Y” date, if that’s not true or rooted in concrete and measurable sales projections. To get an accurate forecast, work with your sales team and CFO to determine revenue and costs, like recurrent and sunk costs in regards to CSRs (Corporate Social Responsibility).. Exemplify projections using easily comprehensible graphs, and include key assumptions, like WeWork’s 5-year financial forecast, which eventually convinced investors that the company is worth a $10 billion valuation.
6. Practice, Practice, Practice!
There’s nothing more embarrassing than stumbling on your words or not being able to answer a question asked by an investor. Make sure that you prepare your presentation well in advance to give you ample time to practice, practice, practice! Practice the week before, days before, the night before, and day of to make sure that your thoughts and key points are precisely mapped out in your head. Use a video camera to record your presentation to critique yourself, or ask a colleague or friend to give you feedback. Then make sure to apply that critique/feedback, and rinse/repeat until you have your presentation [permanently] ingrained in your memory.