In the Age of Start-ups, there is absolutely no dearth of entrepreneurs, no matter what the field. As the start-up gets more crowded, it becomes more difficult to stand out in the crowd and also makes grabbing the attention of investors a huge challenge.
So, how do you convince the investors that you are the next big thing? Preparation will be key. It will be necessary to have a deep understanding of the business, its key drivers, the targeted customer segment and the focus of your company.
HERE ARE FIVE TIPS THAT WILL HELP TO ATTRACT THE ATTENTION OF ANY FUND AND MAKE YOUR BUSINESS AN APPEALING PROPOSITION:
Tell a story: Everyone likes a story. By making your elevator pitch a simple story, you will be able to get the undivided attention of the investor. Ensure there is a consistent flow and it is easy to follow. Don’t get too technical and ensure that you don’t use too many jargons either. Do your research properly and your story should describe the problem that the company is planning to address. Remember, the story you tell will invite probing questions and you must be able to back yourself up on all your decisions. If you get the investor’s interest piqued, then you would have won half the battle.
Show results first: Once you have hooked the investor with your story, follow it up with numbers and features. Is your product or service innovative or disruptive? If you are meeting an investor who understands the space, then ensure that they understand your business proposition well.
You will need money to get customers, but you will also need to show customers to get money. You are better off trying to do the latter than the former as investors will then be convinced of your ‘Proof of Concept’. Showcasing the results will also help the investors get an idea about the true value of the company and the potential revenue that could come their way. Avoid following the crowd.
Find the investor’s interest: Do your homework on investors before you pitch: What are their interest areas? Is what the entrepreneur is trying to gain from his business at par with what the investors are expecting? Do not inflate your numbers or omit critical information that will impact the business or exaggerate the extent of business relationships.
A good investor will always do due diligence and so entrepreneurs need to be open about whom they approached for investment. Investors will always do their own background checks and if they find something being misrepresented, then the relationship will start off on the wrong foot.
Quality of investment: There are different kinds of investors. Some investors just want to invest their money and then not get involved in the day-to-day operations, while others insist on a broader role. Some of the biggest factors that an investor considers during decision-making is if the entrepreneur understands the kind of space that he/she is operating in, the dynamics of the environment, the capability to stay in the market and aggressiveness of their growth plans. Having a clear-cut exit plan in the start-up pitch will tell the investor how the entrepreneurs have envisioned the eventual transition of the venture.
If a start-up has no exit strategy, then it might indicate that they are more likely to build a lifestyle business than a potential high-growth venture.
Passion, Openness & Flexibility must shine through: Investors want to build relationships with entrepreneurs who have the passion, are flexible and open-minded to relentless change. That combined with their optimistic nature and enthusiasm will see them through the toughest of periods.
Investors want entrepreneurs to be open and responsive with them so that even if any issues crop up, they will be able to address the same. Besides, it is their traits of restlessness, impatience for action, the desire to spend one’s life doing what you do best and care the most are some of the characteristics that make entrepreneurs successful in their endeavours.
The original article appeared on: Bizztor