10 Tips To Successfully Pitch to Investors for Funding
Category: Business Advice
A good idea never costs a penny, but making that idea into a reality is another thing.
A good idea never costs a thing, but to put that good idea onto paper and turn it into a successful business doesn’t always come cheap. Whether you need $5,000 or $500,000 to building your business, you more often than not must pitch your idea to an investor to obtain some sort of funding. This process can be very daunting, whether you are pitching to a venture capitalist, private investor, a bank or at a government agency.
In one particular case, Rishi Prabhu and Steve Szaronos raised $800,000 in about 5 months last years (2012) for their lifestyle subscription service for men called Bespoke Post. Similar to services such as Fancy, Bespoke Post mails out a box of goodies ranging from shaving essentials to wine-tasting paraphernalia.
One of the reasons why they were able to obtain funding though private networks is due to the fact that when they arrived to pitch the idea, they knew exactly what they were talking about”. It is very important that entrepreneurs have the ability to demonstrate likability and flexibility. When you’re starting your business you must be very humble, since nobody will see your business model the way you see it, at least initially. You definitely need to work towards adjusting the vision.
Build a Great Business Model, Then Seek Investor Funding
Before seeking funding, Prabhu and Szaronos operated Bespoke with little to no money for the first few months, doing whatever it took on their own, even packaging the boxes which they sent out to clients. The initial process wasn’t even about the money initially, it was about perfecting the model and the business itself – the money came afterwards. Once they had obtained good client base, Prabhu and Szaronos felt ready to prove the company’s viability and seek funding.
The 10 tips that these two business owners have for you when pitching your idea for funding:
Beyond the main tip for first building a business before searching for funding, all entrepreneurs must understand all aspects of their business and be prepared to get grilled by the investor (whether the bank, private lender, family member, a government agency or anybody willing to fund your venture).
Here are their top 10 tips for presenting a winning pitch:
- Fully understand your business, your market and how your company fits into it.
- Have a clear strategy for capturing clients, and know how much it will cost.
- Have a good idea of the customer retention rate.
- Explain to yourself why you need funding.
- Present a detailed plan for how you will spend the money.
- Assemble a reliable, knowledgeable team with defined roles.
- Have a clear focus for the business: Less is more.
- Approach the meeting as a conversation.
- Attitude matters: Be likable, while exhibiting a strong work ethics
Demonstrate flexibility to change; building a start-up is a fluid process.
Once you are ready to pitch your idea, go through the check-list once again and ensure that you have each point covered. If you have a partner, makes sure your partner is on the same page as you. Last thing you want is small differences in your idea and your partner’s idea being the reason for not obtaining funding. When you both agree, search for funding from your local government in Canada, or try to obtain a low interest loan from a local bank – or a step further and search for investors, venture capitalists and silent partners.
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