You’ve likely heard or read news stories that talk about a company “courting investors”—and that’s really what this is. When you’re looking for investors, focus on those who typically invest in companies similar to yours. Then, work on making a personal connection with those investors. For example, if you learn that one investor you’re really interested in is passionate about breeding huskies, you could find a way to integrate the dogs into your pitch in some way—even if it’s just as an impromptu mascot.
For example, suppose you have a nutrition app. While there are lots of nutrition apps on the market, yours is the only one that allows users to scan any barcode to upload nutrition information from a food. This feature is sure to attract people who want to keep track of the food they eat but think it’s a lot of work to do so. Also look at how easy it would be for you to penetrate the existing market. For example, if you’re trying to enter a market that’s heavily regulated, it might take you some time to gain traction. While you’re cutting through red tape, you’re also burning through money—something investors will be very aware of. On a mission to disrupt a big market? As sexy as it is to be a disruptor, a lot of investors will be leery because of the high risk. If you want to go this route, make sure you’ve done your homework and can prove that the market you’re targeting is ripe for disruption.
Include the specifics of your current financials along with your projections so investors have a clear picture of how your business is doing and what your needs are. If someone is going to invest in your business, they want to know that you’re organized and prepared to hit the ground running—your business plan shows them that. [4] X Research source
Your vision or company mission Current traction Market opportunities Monetization/revenue potential Team members Competitor research What makes you different from competitors
Personal details will really make your story stand out. Struggles you’ve faced and hardships you’ve overcome—either individually or as a team—show your strength and resolve. If the idea for your product or service came from a problem you personally had and wanted to resolve, talking about that is a great way to get investors to empathize with you. Keep in mind that a lot of investors have pretty short attention spans. [7] X Research source Use your story to keep them engaged, interested, and excited about your company.
Typically this means taking what competitors offer and tweaking it, not reinventing the wheel. Your product could be faster, more direct, more efficient, smaller or larger (depending on which is better for consumers), or more convenient. Use free government sources to get a lot of data and information about your competitors and the market you’re trying to enter. They’ll help you understand what aspects you should focus on if you want to find your competitive edge.
When you’re answering investors’ questions, try to put yourself in their shoes. That will help you craft an answer that’s more closely tailored to their interests in asking the question in the first place. [10] X Research source At the meeting, investors might also make suggestions of ways you could improve your product or service. Always remember to thank them and tell them you’ll take it under advisement. They have years of experience and can give you some great ideas. Be really clear about what you know and what you don’t. If you don’t know something, don’t just make it up—let the investor know that you don’t have a good answer for that but you’ll get back to them as soon as possible. [11] X Research source
Perhaps the most important part about having a meeting with investors is making sure that meeting starts on time. It’s okay if they’re late, but if you’re late, you’ve likely already lost your funding opportunity before you even make your pitch.
If an investor asks you a question, stop and respond to it immediately—even if you’re planning on covering it in more detail later. You can give a brief answer, then say, “I’ll cover that in more detail in a moment; you’ve actually anticipated my next section. "
A 4-year revenue projection is generally a good place to start. You might also want to include alternate projections and statements that analyze what might happen if your business grows at different rates or expands to different sectors or geographic regions. The most important thing here is that all of your documents are accurate and your projections are relatively conservative. If business finances aren’t in your wheelhouse, hire an accountant to draw these documents up and explain them to you.
Don’t be afraid to ask for what you need! If an investor can’t meet your whole need, they’ll let you know—but they might still want to offer you something. Typically, investors are more interested in a realistic, well-planned budget that shows you understand what your expenses will be every step of the way. To see this more easily from the investor’s perspective, imagine a friend tells you they’re going to buy a brand-new car for $500. You know this is ridiculous—you can’t buy a brand-new car for such a low price. This is how investors feel when start-ups claim they only need a small amount of funding.
It’s also a good idea to shoot investors an email immediately after the meeting. Thank them for their time, mention something they said that really struck you, and let them know they shouldn’t hesitate to reach out to you if they have any further questions.
