How to impress investors

Discussion in 'Articles & Tutorials' started by Will Passmore, Jan 23, 2013.

  1. Will Passmore

    Will Passmore
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    How to impress investors

    Investors want to know about your product, your business plan, your goals and the timing of those, but also you and your partners.
    It is important that you and your partners present yourself as professional, but people that have the ability to socialize. As a professional I myself have realized that a lot of the time people are more willing to give you a chance if they like you, regardless of your product. That is not a guarantee that they’ll invest, but if they like you, you have a much better chance of leaving that room of investors a happier person.

    Your pitch should be straight forward. You must avoid trying to convince the investors that their investment is logical through your words, and do it through yourself and your product. Do not bore them. There is no need to talk for two minutes about data that they’ll forget. It’s much better to have pamphlets ready; feel free to include graphs, data charts and even side commentary.

    Regardless of how many pamphlets you may have, you must talk as well. Starting off with some casual talk is good. If the investors feel like you are genuine person, they’ll listen. If you start off with a bad impression, they’ll be thinking more about their upcoming meal than your pitch.
    After you’ve established your genuineness, recreate your persona into one of a professional. It is very difficult, but you must speak to both the smartest and most dumb person in the room at the same time; make it understandable. Avoid terminology that they might not understand. It is okay to relate advanced concepts to football; it works and it’s easy. (Feel free to pick another sport or anything else that is commonly well known by the majority.)
    The start of your pitch is the most important. As I’ve said already, you need to establish a connection with the investors. You need to show how you and your partners are professional, and then you need to introduce the core concepts of your product so it can be easily understood throughout your pitch. If you get the beginning of the meeting wrong, you can always recover; but your chances of success are lowered.
    If an investor doesn’t understand, answer calmly and make sure you take another approach. If they didn’t get it the first time, you don’t want to just repeat the same prepared speech - The specific investor may not learn (again), and the other investors may wonder whether you are truly passionate and know your product or if you are simply speaking from memory.

    Once you have pitched your product, it is time to gage the room. Have you “bought” the majority of the room? Do they have questions? These things are important. You do not want to skip straight to the financial part of your pitch. If possible do not even speak about specific cash amounts until you are confident each investor understands you and your product and is intrigued by it. This is not always possible though. If an investor is not interested whatsoever, it may be worth it to ask them why - However, they may offer up some really good insight and drive other investors away from you as well. Thus, it is dangerous.

    If you have completed this phase then it may be wise to start slowing down your process. You want everyone to start processing information as slowly as possible as even a low figure number can appear big if it comes flying at the investors (I’m talking about a financial goal for fundraising).
    When you do talk about financials you want to not only include your “wish”, but also what is completely necessary. Do not lie, or make this figure larger. You should tell them the extreme minimum amount that you need for your product to truly launch (or continue). After this number though you should pitch a higher amount based on what you will need for the future, expansion and maximum returns for the company and the investors. You will find that some will go for the larger number, as they value a long-term commitment. Others may only invest in what you truly need for right now and some won’t invest at all. Respect their decision. It is okay to reiterate your expansion goals (to raise more), but don’t drive them away by being too pushy.

    At the end of your pitch you should show your gratitude for not only their investments, but their time. Make an effort to go to the ones that chose NOT to invest first. Thank them for coming and listening and offer to speak with them at anytime if they have any questions or comments. This will give you more time for the real-time investors and improve your ‘reputation’ in the business world - You’ll continue your genuineness and maybe you’ll win some friends.
    You’ll need them!
     
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  2. daytrader

    daytrader
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    Thanks for posting. I'm sure these will also work in finding sponsors. Just wanted to ask how am I going to gather potential investors in a room?
     
  3. eelizasanchez121

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    Now that is a really big question. This is the biggest task of all.
     
  4. Fergal

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    If there are any government funded enterprise support agencies in your area, you could start by contacting them. Ask them if they can help you get in touch with potential investors that might be interested in your idea. You could also contact banks and venture capital funders and pitch your idea to them. Another option would be to search for investment clubs or business angel investors.

    The tips in the article don't just apply to presenting to a room of potential investors, they can also be helpful for one to one investment presentations.
     
  5. daytrader

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    I have actually joined a startup group within our area and I have once posted it here http://www.businessadviceforum.com/showthread.php/42039-Searching-for-business-Partner

    The activity we did was somehow like pitching but its a sort of a mock. they let us write a noun and adjective in each piece of paper and drop it in a basket. You will then be called infront to pick two papers inside the basket and then pitch whatever idea you can come up with it. If for example you got "peanuts" and "travelling" then you can discuss whatever it is that you have in mind. Maybe you are to create a traveling peanut machine or whatever and pitch it infront assuming everyone in the room are investors.

    Anyway, I found some potential investors in linkedin group maybe I'd post in their discussions.
     
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  6. noreturn

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    Great read, I find the most successful is to show them that you will be successful and be able to pay them back. One of the best way is to grow them graph of your business, or if you haven't opened your business maybe show them another business like yours.
     
  7. scifi

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    I have taken part in my BPlans Competitons where many investors and VC's comes as a judge.. Their Final decision is broadly based on 'Money and Resources'.....Practically All they are interesting in is an Appealing investment Plan and a Clicking ROI(Return on Investment) plan..Since they are people with seldom same background as of yours...

    You are lucky if you find an investor who can truly understand your product and your vision.....
     
  8. daytrader

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    Thats the challenging part, can't imagine what I'd say to convince them with a limited time at hand.
     
  9. Blonde

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    I think in order to attract and impress investor in an effective way you need to make sure you offer them with sources that will talk advantages of you with regards to being able to deal with operating your own company. Traders want to be confident that you have what it truly requires to run your new start-up.
     
  10. Will Passmore

    Will Passmore
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    Hey everyone, sorry for the lack of replies here (from me)!
    Joining a start up group is an awesome idea. Even if you do not meet serious investors, you can often meet people that are:
    A. Thinking about starting something up / Already starting up a project
    B. Have done the process before & can teach you
    C. Have other things to offer you that can help you become a better entrepreneur

    Impressing investors is definitely difficult and it truly takes a whole combination of things to be good at it. However, the social aspect of business transactions is something you need to focus on. Their perception of you can change everything.

    I like what some of you have had to say; Making sure you can show potential investors what other businesses in your market (or niche) do, and how successful they are, is important. At the same time you need to show them how you are diverse, unique & how they won't be a full on competitor.
     

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