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7 key tips on how to pitch to investors

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Congratulations if you’re progressing towards your goal of raising capital. An early step is pitching your business. This is a short presentation to potential investors, usually with the founder speaking, presenting a short pitch deck, and answering questions. We understand how intimidating pitching your business to investors can be. To assist with your preparation, we’ve set out seven tips and tricks to ensure you can address any questions and set yourself up for success on how to pitch to investors.

1. Short and sweet

Start with an elevator pitch. Be able to explain your idea, the market opportunity you’ve identified, and your goals in 2 to 3 minutes. If they are interested, they will ask to hear more. It is a good idea to have a pitch deck (slide presentation) with an executive summary that you can show investors at the outset. If investors feel as though it takes too much time for them to understand your idea, then they may feel customers will think the same way. This is likely to put them off investing in your business.

2. Prove it

Having a well thought out business plan is necessary. You need to know your current numbers and your projections and support your calculations and assumptions with facts. This will help sell your idea further and increase your chances of investment.

Your aiming to prove that your business is worth the risk and as such will want to highlight your track record and experience. Be confident that you can show investors that your idea is a viable business.

3. Sell yourself as well as your business

Potential investors are assessing you, just as much as they are assessing your business. They are ultimately backing your ability to execute your plan. They will make judgments about your idea and your skills based on their impressions of you. It is important that you and your investor can build a positive working relationship and that your investor knows you are a person who can succeed as an entrepreneur. They will also want to know that you can build and lead a team.

4. Be realistic

Investors are wary of over-enthusiastic and over-eager founders that present numbers and goals that are unattainable. Don’t simply give a projection. Have a realistic and sustainable plan, backed by proven strategies, sales and marketing tactics. It is prudent to present a best case, moderate case, and worst case scenario to show you have considered the risks of your business.

5. Have an exit strategy

Demonstrate that you have planned ahead and thought about the exit strategy. Reassure investors that you have considered a business sale and whether this business could be offered in an initial public offering. Have a timeline on when this will occur and why it makes sense for it to take place then.

6. Research your investor

Show that you have completed your homework on the investor you are pitching to. Is the investor an early stage investor? What industries do they invest in? At what stage of a business’ life cycle do they invest?

Research what kinds of businesses the investor has funded before, what amounts, and whether they have participated in subsequent rounds of funding. Pitch your idea from an angle that will appeal to them rather than what excites you.

7. Follow up

No matter how the meeting went, it is sensible to follow up with the investors afterwards to get feedback. Ask if there is further information that would have been useful to include. Seek feedback on your pitch style. Be appreciative of their time and guidance.

We understand that pitching to investors is daunting but it can be less so when you adequately prepare. If you have any questions – ask! As a startup ourselves, our lawyers are well-versed in raising capital and answering questions from investors.

About Ursula Hogben

Ursula Hogben is General Counsel at LegalVision. She has over 15 years' local and international investment banking and corporate law experience. Ursula has expertise in capital raising, mergers and acquisitions, information technology and general corporate law. Ursula is an active member of Australia's entrepreneur community and speaks, writes and is interviewed on issues relevant to startups and established businesses.

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