Six ways to impress investors
By Julian Harlow
Approaching investors with a business proposal can be daunting. One way to get some practice before approaching potential financial backers is to realise that your investors include a broader range of people than just those who provide funding. Practising all or part of your pitch on people such as key employees, suppliers or anyone else who will be important to the success of your business can be great preparation. If you have also covered the following six areas, you will have a strong foundation for presentations to investors.
1. The one reason your business will succeed
There are very few business ideas that are truly original. Investors want to know what it is that separates your plan from similar proposals - the singular thing that makes your business attractive as an investment. There are of course a multitude of factors that investors consider, but emphasising the one reason that makes your business different from others will make your business stand out.
2. Be prepared - in detail
We've all had great business ideas - it's the effort and thought required to turn those late-night brainstorms into a reality that marks out an entrepreneur. This is the major factor investors consider when looking at a venture. The more you can demonstrate that you are well prepared, understand your business plans and can talk about the important numbers associated with the plan, the more seriously your proposal will be taken.
3. Put your experience on show
Demonstrated knowledge of your industry can provide important reassurance to investors, so make sure the experience within your business team is on show for them. If there is little experience within your business, be prepared to explain how it is set to thrive with fresh thinkers.
4. Let them know you are also invested in the business
Investors by definition are taking a risk entrusting their funds to your proposal, and they expect the success of your business should be at least as important to you as to them. Don't overplay it as investors presuppose you will be making sacrifices, but make sure potential backers are aware that you are also invested in the success of the business.
5. Research your backers
Showing an interest in somebody is always a good way to get on their good side, but researching potential investors is not simply about flattery. Looking into the background of investors will help you focus on those who have a better understanding of your sector or are more likely to appreciate your proposal.
6. Develop a relationship
After initially attracting funding, your business will need to move on to managing relationships with investors. That means you'll need to communicate with them, which requires not just providing information but also listening to what they say in turn.
Impressing your investors should not simply be about convincing them to be sources of funding for your business. Instead, they should be seen as resources for gaining advice, expertise and even access to other investors. After all, they want your business to succeed almost as much as you do.