7 Tips for an Investment Pitch That Gets Funded
If you have an excellent startup idea and require financing, you must prepare properly to obtain your first investor. Once you have the financial support of an investor, getting others will be much easier.
In this article, San Francisco Entrepreneur Alan Safahi, Principle at Safahi Global Advisor shares with you a little of his experience as a 6X startup founder and entrepreneur, detailing 7 tips for an investment launch that will be better positioned to get financed.
1. Select the right audience
One of the key aspects is to know very well the audience to whom you must address. The type of investors you should target will be determined by the phase your business is in, and by the amount of money you want to raise.
Make sure you know your audience, and design a presentation accordingly. Use your own language for them and detail each aspect of interest about your venture.
2. Tell a success story
You must have total confidence about the success of your business, and transmit it to your potential investors. Tell your audience what are the reasons why your venture will be a success, and how you will achieve that.
Focus your story on the future, on the profits your company will bring, and how the investment round will drive the valuation of your business.
3. Pass on your passion
The passion you feel for your new project is the same that you should make the group of potential investors feel.
Let them know in detail all the potential that your company has, how it will change the world, how you will do things in an original way, and what is your secret recipe.
Explain to them how their investment will allow you to revolutionize the market, and how it will help you take your company to the top of success.
4. Keep it simple and understandable
According to Safahi’s experience as an advisor, a good technique to transmit information is to do it in the simplest way possible.
Regardless of the level of mastery or knowledge of your investors, you should present the information about your startup in the simplest possible way. Design your content in such a way that any primary school child can understand it.
Avoid using extremely technical language. Design your presentation to explain the essence of your company in a matter of seconds. This is the most effective way to do it.
5. Describe the sales you have obtained
If your startup is already making a profit from sales, you should mention this point to investors.
One of the techniques that, like Alan Safahi, has used in the business world, is to present sales on a timeline. That is, indicate the amount of dollars you obtained from sales in a certain period of time. This gives investors a clear view of what you have accomplished.
Another important aspect is that you are prepared to explain how you can continue to sell and increase your profits. This is extremely important to potential investors.
6. Design a plan with well-defined deadlines
You must design a schedule indicating a well-defined and not very long term, to raise the money you require.
This period can be of great advantage to you in several aspects. On the one hand, having a deadline can encourage investors to seal a deal with you. It can also help you facilitate the contract process by reaching an agreement with multiple investors.
Remember to clarify to potential investors that you have a maximum term to reach an agreement.
7. Create and explain an exit and profit strategy for investors
Even if you are not thinking of leaving your business, investors have another point of view. It is very important for them to know what will happen in the event that their business relationship with your company ends.
You must explain precisely and concretely how they will recover their investment. How they will get their reward multiplied or compounded. Let them know that your goal is to achieve your success and theirs.
These tips have always been very effective in everything related to the startups that Alan Safahi and his partners at Safahi Global Advisors have advised in the past which should work just as well for any startup.
About the author
Alan Safahi is an Iranian-American entrepreneur and six-time startup founder with over 30 years’ experience in the information technology, telecommunications and financial services industries.