You’ve got a good business concept and you’ve researched potential investors. You’ve been living and breathing this venture for years – your passion is palpable – but working out what investors want to know can be overwhelming.
How do you not waste potential investors’ time with superfluous information? And how do you ensure the opportunity you’ve been wanting for years – to finally scale your business – does not pass you by?
CCIWA Head of International Trade Services Michael Carter has seven tips to help you get an investor on board:
1. Be honest and integral
If an investor senses an inconsistency, Carter said “they’ll be turned off from the start and you’ll struggle to win them back”.
“Present yourself as an authentic, trustworthy business partner,” he said.
“Then, if your business is investment ready, with a clear growth strategy, market demand and strong financials, you should have their undivided attention.”
2. Practise your investment pitch
This is a brief synopsis of your business, your point of difference and why it will make money, and your background (because much of the final decision to invest is around the strength of the team). Include:
- Your business’ current financial situation
- Growth strategy, explaining market demand
- How you plan to use the investor’s money to grow your business
“Keep your pitch short and sweet. Set the scene with a problem – how does your business solve it and why has no one else done this yet or can’t?” Carter said.
“Within a couple of minutes you’ve established market demand, your point of difference and why your business is a smart investment.”
Fundamentals of a strong pitch deck
- Cover slide: Start with a visually appealing cover slide that includes your company name, logo, and a tagline.
- Problem statement: Clearly articulate the problem or pain point that your product/service addresses. Explain why it is a significant problem and how it affects your target market.
- Solution: Present your solution and highlight how it solves the problem mentioned earlier. Explain key features or unique aspects of your point of difference.
- Market opportunity: Describe the size and growth potential of the market you are targeting. Provide data and statistics to support your claims and showcase market demand.
- Target market: Identify and define your target audience, including characteristics, demographics and needs of your potential customers.
- Value proposition: Communicate the value and benefits your product/service offers. Why should they choose your solution over alternatives?
- Business model: How your company generates revenue and sustains itself financially, including pricing strategy, revenue streams and any key partnerships or distribution channels.
- Competitive analysis: Overview of your competitors and how your product or service differentiates. Highlight your unique selling points and any barriers to entry you may have.
- Marketing and sales strategy: Outline your go-to-market strategy and how you plan to acquire customers. Discuss marketing channels, customer acquisition costs and sales approach.
- Team: Introduce your core team members and expertise.
- Traction and milestones: Showcase significant milestones, such as partnerships, product launches, user growth, or revenue milestones. This demonstrates progress and validates your business model.
- Financial projections: Summary of financial projections, including revenue forecasts, expenses and key metrics. Helps investors assess the financial viability and potential returns of your business.
- Funding requirements: Clearly state the amount of funding you are seeking and how you plan to allocate the funds. Explain how the investment will be used to fuel growth and achieve specific milestones.
- Call to action: End pitch deck with a clear call to action – e.g. request a meeting, provide contact information, or invite questions.
3. Make your passion infectious
Carter said give the investor insight on how you operate and what you would be like to work with.
“Show your passion for the business – the ‘why’ behind it (other than making money),” he said.
“Investors want to see your industrial alignment, understand your commitment to the business and your persistence.”
4. First meeting
The first meeting is crucial. It sets the foundation for your business relationship.
“Ask for advice, not money,” Carter said. “When you get the advice, either implement it, or if you don’t, explain logically and with evidence why not.”
5. Own your failures
Investors would appreciate you being upfront about your failures if you learned from them.
Explain how your mistakes have made you grow and what you changed.
“It’s good when entrepreneurs show they’re trying again because it demonstrates their determination,” Carter said.
Questions to expect from investors:
- What problem does your business solve?
- How do you define your target market?
- What is your business model?
- How do you plan to grow your business?
- What are your plans for the capital you’re raising?
6. Be coachable
Make sure you’re willing to listen to advice and commentary and either implement it or respond to it respectfully.
“When you’re in front of a potential partner you need to show your ability to listen, react and really hear what they are saying,” Carter said.
“Showing how their experience and expertise will be valued is crucial to the success of your relationship with an investor.”
7. Take what you need
Make a checklist and take the following to any meeting with a potential investor:
- Business plan
- Current financials and ability to answer very detailed questions about financials and other aspects such as marketing and sales distribution
- Revenue forecast and market share
- An understanding or analysis of the competitive marketplace
- Corporate and team structure
- A broad understanding of what needs to be done in the next 12-18 months
CCIWA’s International Trade Services team helps businesses reduce the time, cost and risk of going global. Contact the team for a free consultation on 08 9365 7620 or via [email protected].
