Pitching to Investors

I am working with a client right now and we will be meeting with some potential investors later this month to raise additional capital.  Previously I have created posts What Type of Investor Do I Need or How to Raise “Smart” Capital, and even The Process of Raising Capital. This week’s post will provide some insight into how to pitch investors when you are raising capital.

1. Sell, (not tell) your story.  Don’t just recite bulletpoints on a presentation.  This is YOUR story, and you need to show your passion for your idea/company product and convince the investor that you can deliver.  Keep in mind, the investor probably heard a pitch from 5-6 other companies like yours, so you have to be unique and standout.  This is why I like for my clients to begin the presentation as nobody can tell their story better than them. You want the investor to buy into and share your vision.

2. Focus, Focus, Focus – FOCUS on your end goal of the meeting — to get funded. FOCUS on exactly what you are committing you can do.  The last thing you want to do is overpromise and underdeliver.  Set the right expectations upfront.  FOCUS on how the investor(s) are receiving your pitch/presentation.  These presentations are fluid and you need to read the body language and faces of how your message is being received.  By doing this you can adjust the time you spend on different components of your presentation.  For example, some investors love to hear numbers, and others don’t. Keep in mind they will have access to all the financials and can review later.  Don’t make those the main focus of your presentation.

3. Be specific – don’t be vague in describing your business strategy.  Tell the investor your target market and why this is your target market.  Explain how you plan to acquire customers, what you believe your realistic addressable market is, convey why the business model you have chosen will be successful, etc.

4. Be forthright and honest about the challenges and the competition.  The reality is there are market challenges that other competitors may already be addressing, and the investor knows this.  Don’t put on the “rose-colored glasses” and infer that there will be no bumps in the road and that the path is easy.  If others are addressing these issues, you can as well, and you just need to convey your plan on how you plan to do so. 

5. Rehearse or role-play anticipated objections.  This is key to any investor meeting. As I have mentioned before, if you don’t properly address an objection, your meeting is essentially over.  Change Your Lens, and put on your investor hat and predict the questions they may have for you.  For example, why is your team the one to be successful?  Why should the investor invest with you instead of the others beating down their door? Why do you need $20M, and not $15M?, etc. The investor wants to understand how you plan to spend their money.

6. Talk a little bit about your exit options.  After all, the investor is not going to get a return until some type of liquidity event.  You don’t need to cover a lot here, but you do want to give the investor an idea of your exit strategy. 

Remember the key P’s: – Problem, Product, People, Proof, Profit Potential

If you are planning to raise capital for your business and need some assistance, please reach out to me.