You may have come up with what you think is an excellent idea for a new business. Unfortunately, launching a new company requires a lot more than just an idea. What you really need to get that idea up off the ground is financing. Potential investors pass on ideas for new business ideas every day. In many regards, how you present your idea to those investors will determine whether or not your business ever launches in the real world.
1. Understand Your Business Model In and Out
The thing you should know about pitching your potential business to investors is they expect you to already know everything about your proposed company. While this may be difficult to wrap your head around since it’s hard to describe something that has yet to come into existence, you need to have a definite plan mapped out for how your company will work. This should include the creation of a formal business plan. However, you may be expected to provide detail well beyond the business plan. If you don’t have answers when an investor throws a technical question at you, they’ll probably pass on giving you any funding.
2. Use Online Tools and Resources
As with everything in the business world, the process of pitching a new business idea has moved into the realm of the internet and digital communication. In many cases, you may be expected to produce a digital version of your pitch. This may even be the case if you are also expected to perform the pitch in person. That way, the investors in question can examine your digital pitch to give it some more thought before they sleep on the decision. In certain cases, this process is mostly performed online. Online resources like Space Talent can help entrepreneurs submit a pitch deck for space startup funding. A pitch deck is a short presentation that covers the basics of the proposal.
3. Know What You Need the Money For
When pitching your business to potential investors, it’s important to know more than simply how much money you are asking for. Instead, you should explain exactly what their money will be spent on. You should break this down for each dollar you are asking for. The level of detail here is important. Investors want to know where their money is going. If you can’t tell them, you’re going to be in trouble. They may assume your proposal is a scam otherwise.
4. Make Your Business Into an Entertaining Story
While launching a business wouldn’t always make an entertaining film, you should try to embellish this a bit in your presentation. While you shouldn’t exaggerate or lie, your pitch should be entertaining. If there is anything entertaining about the creation of your business, you should certainly use it to help sell your idea. Imagine how Steve Jobs may have explained how he created computers in his father’s garage when trying to obtain financing to help build Apple into what it became. Try to include details that will inspire confidence or show how hard you have worked to get where you are.
5. Highlight Your Experience
According to the Harvard Business Review, one thing that potential investors will absolutely need to know about is your experience in the particular business field you are pitching. Make sure to communicate this experience clearly, and draw from that experience when answering the investors’ questions. This is vital since it makes you a more trustworthy candidate to loan money to. If they assume you have no relevant business experience, they may also assume they would be throwing their money away on a doomed project.
6. Learn From Your Mistakes
The harsh reality is you may have to pitch your business idea many times before you eventually secure funding. You shouldn’t give up. However, your first pitch will probably not resemble your last, hopefully successful, pitch. This process requires adapting over time to be successful. You can probably tell just from reactions in the audience what may have not worked as well as you had hoped. The kinds of questions you receive should also be integrated directly into your pitch and your pitch deck. Questions may sometimes mean your presentation was lacking information or did not create enough confidence.
Overall, don’t give up even if your first pitch fails. It’s going to be a learning process. However, you can increase your chances by making sure you present yourself correctly as well as your rationale for the business coming into existence. If you can help persuade those investors that they will make a profit, you will get the funding you need to launch your company.