Written by Paula Short & Rachel deCaux, Beauty Boulevard Ltd
Investors often make the decision to invest based on the people pitching. If they do choose to invest, it is because they believe in you and your business. If successful, you will have to work with these people. Make it a good relationship, like a good marriage.
KNOW YOUR FIGURES
Most important! When pitching for investment, you need to show you have a good knowledge and grasp on all the financial aspects of the company. Study the numbers so that you know gross profit, net profit and predicted growth inside and out. Know your bank balance. Cash flow is the lifeblood of a business. It’s a good measurement of how a business in actually operating.
COVER YOUR ASS
Ensure you have taken steps to protect your product. Your logos, trade marked designs and copyrighted materials are a very important part of your business and define you as a brand. Intellectual property theft is (annoyingly) quite common. Register as much as you can to help future proof your product. There are lots of helpful websites with great advice on how to protect your company but if in doubt seek, professional legal advice.
KNOW YOUR AUDIENCE
Where possible, research the company/person you are pitching to. What are their likes/dislikes, their individual characters? Knowing their bugbears will allow you to match your pitch to your investor.
KNOW YOUR CUSTOMER
Understand your business sales to date. How you gained them and how you encourage repeat business. If part of your business is knowing each customer personally, how can this be up scaled without losing the personal touch?
As a new company, it is very hard to have an exact value. Be sensible with your numbers. Your enthusiasm, experience and entrepreneurial skills may not be valued as highly as you think.
FORECAST AND EXIT STRATEGY
Investors want to make money. Show the investor where you want to sell your product and how you intend to make that happen. They need to know that their investment will grow and they can recoup their money, and more. PRACTICE, PRACTICE AND PRACTICE SOME MORE
PRACTICE, PRACTICE AND PRACTICE SOME MORE
Rehearse your pitch every chance you get. Video the pitch so you can watch it back. You can pitch to friends and family, but sometimes this is unproductive as they can either be too kind or too harsh with their feedback. These situations can be quite stressful, so remember to breathe. Sounds simple but its amazing how you can forget to breath under pressure. BE TRUTHFUL
Investors have a knack to zone in on any weakness you may have in your business. Be honest, don’t try and hide anything. Just work on a strategy to minimize weakness, and therefore minimize risk.
KNOW WHAT YOU ARE PREPARED TO GIVE AWAY – BE PREPARED TO HAGGLE
Successful investors don’t get to where they are without excellent negotiating skills. They will be looking for the best deal for themselves. They may push you hard so decide in advance the maximum you are willing to part with to secure investment.