Making the most of the opportunity when pitching for investment

As your business gains traction there will be a moment when you are ready to pitch for investment and get the injection of capital needed for the next phase of development.

Let’s not sugar-coat this: the odds aren’t favourable. Investors and business angels spend their time listening to an enormous number of pitches, and a good rule of thumb is that only 1 in 10 pitches are deemed investable propositions. Once due diligence and the like are factored in, some claim that investment funds invest in as little as 2% of the total plans they receive.

The individuals you’ll be dealing with will have no qualms about telling you if they’re not interested. So, the stakes are high, and the chances are slim. That said, promising ideas are funded all the time, and the accelerator and incubator models that culminate in pitches for investment are becoming ubiquitous.

So, how can you make most of the opportunity to pitch to investors for the injection of capital that your business needs?

 

Focus

Presenters sometimes think that a longer pitch makes them sound more knowledgeable and credible. On the contrary, the best pitches will get straight to the point.

You’ll need to hit all the key points of course, but the extra stuff is often best conveyed during the Q&A that follows. Investors like to be a part of proceedings so give them the opportunity to talk.  Being able to have a conversation with potential investors as opposed to delivering a one-way pitch will endear you to them and quickly build rapport.

 

Practice

It should go without saying, but you really do need to commit to rehearsing and fine-tuning your pitch. We’ve seen many BioAccelerate participants come on leaps and bounds over the course of an accelerator programme only to come unstuck at the final pitch day because they haven’t put enough practice in.

There are no shortcuts or ways around it: you’ll need to deliver the pitch a good few times before the real thing takes place in front of investors. Good accelerator and incubator programmes should allow times for these rehearsals in front of your cohort peers to get you used to presenting to an audience, but if not, make sure you make time to practice on your own or with friends.

 

Storytelling

While your facts, figures and forecasts are undoubtedly important, try to avoid delivering a forensic, dispassionate pitch that’s wholly devoid of emotion or personality.

To really engage your audience, you need to tell a compelling story. Not only will this make your pitch impossible to forget (a big plus when you consider how many pitches your audience has to sit through) but a story that conveys your background, your inspiration, your expertise and your passion also sells you. Don’t forget that investors are investing in you or your team as much as your business idea, so any rapport you can build is sure to stand you in good stead.

 

Detailed information

While potential investors will know a lot about the business world in general, it’s highly likely that they won’t know much about the specific sector that you’re seeking to disrupt. They will want and expect you to know your industry inside out.

This will include having information on the market size, market value, competitors in the same space and prospective customers to hand. In short, you need to come across as the expert in the room to inspire their confidence in you and your product or service.

 

The exit

A common mistake made by those pitching for investment is to neglect offering a compelling and attractive exit to investors. Having worked on something for so long and become so emotionally invested, it’s easy to forget that investors won’t have the same attachment to your new product or service and will want to know how you plan to monetise your product, and by extension, deliver to them a return on their investment. Startups can sometimes get so seduced by their own dazzling new product that they cannot possibly conceive of there ever being an ‘exit’, but failure to show due consideration here is a mistake.

It’s always worth bearing in mind therefore that while you may have developed the product for a variety of reasons, an investor’s primary concern will be maximising his or her returns over an acceptable timeframe.

By setting time aside for preparing and practicing you’ll give yourself the best chance of putting your proposition across powerfully, standing out from the crowd, impressing potential investors and greatly enhancing your chances of gaining the investment you are looking for.

 

ABOUT THE AUTHOR

Ben Jones is from AberInnovation. Aberystwyth Innovation and Enterprise Campus (AberInnovation) provides world-leading facilities and expertise within the biotechnology, agri-tech, and food and drink sectors. Set in stunning scenery between the Cambrian Mountains and the Irish Sea, the £40.5m Campus offers an ideal environment for business and academic collaboration to flourish. https://aberinnovation.com/

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