What does it take to enthuse, excite, and entice investors? These three tips will have you prepped and ready to pitch.
The entrepreneurial spirit is alive and well in this country, so much so that it’s given rise to “Shark Tank,” a popular reality show where aspiring entrepreneurs pitch their ideas to notoriously tough investors, a.k.a., sharks.
What does it take to inspire investors enough for them to open their wallets and fund your business? In her article on Small Business Computing, Janine Popick, CEO at VerticalResponse, says you can learn a lot by watching “Shark Tank” and then applying those lessons in your own business life. Try these three tips to bolster your position—and your chances—before you talk with investors.
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Know Your Business and Nail Your Presentation
While that may seem obvious, it takes time, effort and practice to pull off a seamless investor pitch. And you can’t just know the facts; you need to be able to articulate them in a clear, concise way. Explain “what your company is, what it isn’t, who it’s for, who it’s not for, how you’re different from competitors both large and small,” writes Popick. If someone else does—or did—what you’re proposing, be able to explain that company’s fate and how you plan to differentiate your business.
While you’re at it, add creative and charismatic to the list of qualities your pitch requires. A compelling presentation grabs investors’ attention and shows them that you have what it takes to drive your company and products to success.
Numbers You Need to Know
Potential investors will, obviously, want to know how much your business is worth. To do that, they need to know your company’s sales and its debt. It would behoove you to know your numbers cold; otherwise you risk being summarily dismissed. Also, investors invest for a reason: they expect a fair return, so make sure you provide one. You won’t entice anyone if you offer a 10 percent return on a $250,000 investment.
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Do you have credibility? Proof of significant sales or commitments for future orders from a legitimate source (well-known is even better) goes a long way toward reassuring investors.
Forfeit Your Salary
Don’t be naive and ask investors for back pay. While most investors understand that you need food to eat and a place to live, don’t even think about listing, say, $200,000 as debt because you didn’t take a salary for two years. Not making money while you get your business off the ground is the reality of starting your own business. If you can’t handle that, it may be time to rethink your dream. Artists suffer for their art, and investors expect entrepreneurs to do the same.
Adapted from Fishing for Investors: Tips Gleaned In the “Shark Tank,” by Janine Popick at Small Business Computing. Follow Small Business Computing on Twitter.