Funding is a major aspect involved in any business. It is very important for a start-up to find an investor to grow the business to a large scale. Series A funding is a more significant investment than seed funding and is of essence to every start-up to fuel its growth, stability and acquire more scalable results. Series A investors are inundated with a lot of proposals to invest. In order to convince the investors, it becomes crucial to prepare an impressive pitch. Pitching not only helps in finding a good investment but other resources as well. A good pitch holds the power to turn the start-up into a successfully running business.
A pitch is a verbal or visual representation of a business idea to another business party or investor for venture or capital. It gives a better understanding of the business and the future goals. A good pitch should include all the insights behind the idea and should be compelling for the investor to believe in the idea. It ought to give a succinct gist of the business, reason behind the idea and afterwards an illustration of where it would go and why funding in the business will be an asset. It is extremely important to deliver a good pitch to get the attention of potential investors. The investors provide funding as well as assist in the business plan and assure that the funds are accurately invested.
Venture Capitalists and Angel Investors often fund on the basis of a strong plan and potential. It is thus necessary to articulate them in the pitch decks in a clear and concise manner. Below mentioned are a few pointers that should be kept in mind while pitching a potential investor.
- Understand Investors’ Motivation: It is necessary for the investor to relate or understand the initial problem and that the solution provided is genuine. It is better to demonstrate the issue and the solution to convince the investor that it is a good business. Addressing how the product or service has brought a significant impact in the customer life is a must for the investor to believe in the idea. Being salesy or marketing the business should not be the aim while pitching as it is not for the customer, but for an investor.
- Be Specific: A pitch should be simple and straightforward to minimize the time. Focus the pivotal aspects and use statistics to explain the insights, making it easier to understand. Simplify the pitch and ensure that the investors are able to comprehend the facts right away. A long and tedious pitch is not effective as the more it stretches, the more it gets boring and repetitive. Eventually, it makes the investors confused and they zone out. Thus, a pitch should be clear, concise and on point.
- Have a Motivated Team: An entrepreneur is not only the representative of its business, but also the team involved to build it. In any business, the team is perhaps the main asset an organization has. Series A Investors want to know about the team as much as they want to know about the business. They are worried about whether the core team of the organization has the expertise and experience to lead your start-up to progress. Conflicts in a team are what the investors avoid. The team should have the passion to face the challenges together.
- Demonstrate Customer Validation: Customer validation is to ensure that the research is correct and developing the business model to reflect that information. The customer base should be steady and should approve of the work taken by the company. A proof of validation shows how well the business turned out to be. The data of revenues will assure the investor about the growth in both finances as well as a steady customer base, hence validating the company. If possible, include a customer experience as well.
- Market Strategy and Competition Awareness: A good marketing strategy is always of value to any company. Venture capitalists, before investing should be aware of how the company will invest to increase the customer base. So, prepare a strategy to explain about the marketing and funds required to acquire the new client. The strategy should be framed with the aim to increase the customer base as well as to face the competition with the existing market. Exhibit how the product or service will remain dominant on the lookout and show your industry knowledge in regards to potential outcomes and obstructions.
- Practice Your Pitch: It is always better to be prepared. So practice the pitch loud and clear in similar surroundings before approaching the investor. Practicing will remove the inadequacies and inconsistency and will make it seamless. Enthusiasm and confidence is the key for the delivery of a good pitch.
Synopsis
The pitch should be interesting and should grab the attention of the investor from the beginning. It should be articulated well and have an overview of the business and the story. To intimate the growth of the start-up, one should make sure to show the business built since the start. Growth and development in terms of revenue generated and customer base should be represented. It is not necessary for the investor to relate with the problem, so it is the responsibility of the entrepreneur to demonstrate or make them understand the problem and the solution that their business provides. Additionally, the major problems faced during the initial years of business and the solutions adapted to tackle them should also be included in the pitch to signify the problem solving capability of the team. Lastly, it should contain a brief about the future prospects and how the funding will be an asset.