Last month we talked about transition. That segues nicely into the topic of investors.
This is just as important – preparing and presenting.
Investors are driven by two things; narrative and return.
When preparing to pitch to potential investors, it is important to develop a clear and compelling narrative that outlines your business model, the problem you are solving, your target market, and your unique value proposition. This narrative should be supported by data and evidence that demonstrate the market potential and the viability of your business idea.
In addition to the narrative, it is also important to prepare a detailed financial plan that outlines the projected return on investment for potential investors. This should include information about revenue streams, projected expenses, cash flow projections, and other financial metrics that will help investors understand the potential return on their investment.
The “narrative” is the element that gets them in the door. They ask: What is this business? What do they do? Why do they do what they do and how are they going about it?
A lot of times the “why” and “how” are much more important than what you know. For example, if you think about wireless successful businesses, it’s not necessarily what they produce – it’s how they go about it.
The presentation itself should be well-structured, visually appealing, and engaging. It should be tailored to the specific needs and interests of the audience, highlighting key points that are most likely to resonate with potential investors.
That speaks to the power of that uniqueness in a business.\n\nWhen you think about the TV program Shark Tank, everybody comes in with great ideas. However, the panel always asks: “What are your sales?”
If you say: “We are presale”, that can instantly detonate the value as you have an added belief of what you think it’s going to do as an investor to make it worthwhile that the risk goes up substantially. That’s just it. A belief.
nIf you walk in and answer the same question with: “I did $500 million last year” – that creates more multiple value.
Take the Ring Doorbell/camera system for instance. Jamie Siminoff ended up getting passed up by the panel on Shark Tank. However, the show gave his company much-needed visibility, and it attracted the attention of Richard Branson, who, along with others, invested, and, after some rebranding, Amazon jumped on board. It is now a billion-dollar item.
Ultimately, the success of an investment pitch will depend on a combination of factors, including the quality of the business idea, the strength of the team, and the potential return on investment. By developing a clear and compelling narrative and presenting it in a thoughtful and engaging way, entrepreneurs can increase their chances of securing the funding they need to bring their ideas to life.