It’s a very common scenario, you’ve got a brilliant business idea, you know how it’s going to make money, but as the saying goes; It takes money to make money. In this blog we’re giving you our best advice on how to survive and succeed at an investment pitch.
Step 1: Legal
Your business idea may require a copyright, or you may have to check that your idea doesn’t infringe on anyone else’s copyright. Here’s a useful guide to get you started with copyright.
Step 2: Explore Funding Sources
Investors aren’t the only possible source of help for your new business idea, there are a wide variety of government grants to help you too. Make sure you explore the possibilities, better yet, if you’ve applied for and or been granted some funding from the government, even better!
Step 3: Calculations
An investor won’t be interested in your business idea if they can’t have a crystal clear picture of how much money you need to raise, exactly how it will be used and a timeline for their profit.
Here’s a great blog from Entrepreneur.com on how to calculate the ROI of a new business.
Remember, your Warr & Co accountant is an excellent resource to contact at this stage.
Step 4: Business Plan
Your business plan needs to be water-tight if you’re going to expect any interest from investors. Take a look at our free guide on writing a business plan here
Step 5: Get It Online
If you’re serious about your idea, make as many steps as possible to starting it up for real. Get a logo, buy your URL, get a holding page up, print your business cards, set up your LinkedIn page. You want your business idea to look as ready-to-go as possible, not come off as one of those ‘great ideas’ you came up with at the pub with friends that’ll probably never happen. There’s a lot you can do with little personal investment required to help your business look like it’s taken it’s first steps.
Step 6: Finding Investors
The best way for you to get your idea in front of the right investor is through networking. If someone you know has worked with an investor before, float your idea in front of them, if they like it they may make an introduction for you.
If you don’t yet have these types of connections, try a start up incubator or accelerator. Incubators work by providing a space for young businesses to grow quickly, with access to legal and financial services as well as connections to investors.
You could also try crowd-funding. When you think of the term ‘crowd-funding’ you probably go right to Kickstarter. While platforms like Kickstarter are great, there are others more geared towards finding an investor, rather than lots of people pledging smaller amounts. Check out Crowdcube.
Step 7: Elevator Pitch
Can you present your idea, in full, in 1 minute or less? You’ll need to practice your 1 minute pitch carefully, it should be obvious to an investor right away that your idea is solid and has profit potential.
Your elevator pitch may be spoken in person during a brief minute when your potential investor present, it may be sent to them via email or a third person, or it may be seen online
Investors are entrepreneurs, just like you, but unlike you, they hear pitches frequently. Don’t waste their time with graphs, spread sheets and numbers – that comes later. Instead tell them a compelling story. Start with the problem or challenge you’re trying to solve, move on to your solution, then onto why you’re passionate about it.
Remember, you’re essentially selling yourself and your ability to succeed with your new business idea. Be passionate about your idea, passion shows you’re fully dedicated and willing to work hard to succeed.
Step 8: Presentation
So you’ve been invited to present your idea. At this stage, you know your prospective investor is interested, now it’s time to give them more information. This step is where your carefully calculated figures and business pan come into play. The investor is willing to give more time to this step in the process, as they’re already keen on you and your ideas. But bear in mind, it’s likely you’ll only have 30 minutes, sometimes less! Make sure your presentation lasts approx. 15 minutes so there will still be time for a quick Q&A.
Keep it simple; you’re an expert in your field, but it’s likely your investor is not. Keep your tech-jargon or business acronyms to yourself, keep your copy easy to read and understand.
End with the amount you’d like them to invest and how quickly the business can make your investor more money (remember this shouldn’t necessarily be a pay-back scheme, investors like long-term big payoffs).
Step 9: Negotiation
If you’ve successfully received an offer from an investor, you may think your hard work is over. Not so, don’t forget the negotiation phase is very important. You’ll want your accountant in the loop at this stage too. You may also wish to contact a legal representative to help you understand the detail in offer letters and contracts.
Bare in mind, the negotiation process often takes the longest and will involve a lot of back and forth between you and your investor, but it’s worth it in the long run.
And remember, the team at Warr & Co are ready to assist, guide and advise you on your new business venture. If you’re currently a client, simply get in touch with your contact at Warr & Co for our assistance. If you’re not currently a client, why not give us a call to arrange a free no-obligation consultation, we’d be more than happy to assist you with planning, financial advice and preparation of your investment pitch. Call us on 0161 477 6789 / 020 3174 1436 or email us.