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Steps To Take To Pitch An Idea To An Investor

What are the steps to take to Pitch an idea to an investor?

Startups take money to launch and grow. Investors can be a great source of external capital to get off the ground and scale things. Yet, the media often over simplifies getting funded. There are more steps than you’d imagine from simply reading the latest headlines. 

Here’s what you really need to do before asking investors for money…

Market Research & Business Planning

Even for your own sake you need to complete thorough market research and formulate a Business plan.

This will be an essential asset and guide, even if you never raise a penny in outside funding. If you plan to raise capital, then this will be critical for displaying pertinent data points and metrics, ensuring you’ve structured your company to be in a position to get funded, and on the best terms, and to show your prospective investors what’s possible. 

This process will also help you identify how much money you need to raise, what it is best used for and when you’ll need to raise again. 

Create Your Pitch Deck & Supporting Materials

Equipped with all of the above information you can now create an effective pitch deck which is really tailored to your short list of optimal investors. 

You don’t have to reinvent the wheel here. You can utilize a proven pitch deck template and customize it for your startup business.

In this regard, keep in mind that in fundraising storytelling is everything. In this regard for a winning pitch deck to help you here, take a look at the template created by Silicon Valley legend, Peter Thiel (see it here) that I recently covered. Thiel was the first angel investor in Facebook with a $500K check that turned into more than $1 billion in cash.

Remember to unlock the pitch deck template that is being used by founders around the world to raise millions below.

You will probably need other supporting materials as well, including:

  • A one page business plan
  • Action plan
  • Executive summary
  • Investor updates

If you are running a fundraising campaign you may also need a good amount of marketing materials and collateral. 

This may include:

  • Emails
  • Explainer or intro videos
  • Profile pages
  • Press releases

On top of this you’ll need to prepare several verbal pitches of different lengths. This will range from your elevator pitch to full presentation. 

Put Your Team Together

If you are starting a business that warrants getting funded you will need a team. In fact, a big factor in getting funded will be the strength of your team. This is a critical part of the steps to take to pitch an idea to an investor.

Your founding team is probably the number one deciding factor when investors debate writing you a check. It’s not your business idea, size of the market or how ingenious your tech idea is. It is all about if you have the best team. A team that will roll with the punches and execute through all of the challenges that are coming.

This is the time to build out your founding team, install great executives and department heads, and to enroll respected advisors.

Start Working On The Basics

The most fundable startups are the ones which are proving they can execute and achieve what they talk about. The more progress and results you can show, the easier it should be to convert investors. That gives you a much better ROI on the time and money you throw into fundraising campaigns. 

If you really do well in this area you may even begin attracting inbound interest from investors. That can make a huge difference given some CEOs spend 50% of their time trying to raise money.

In addition to building out your fundraising team this includes choosing the right corporate and tax structure, building the prototype and MVP, testing the marketing, and securing those first sales. 

Research Your Investors & Fundraising Platforms

Know your options. There is more than one way to raise money for your startup business and something to keep in mind as part of the steps to take to pitch an idea to an investor. 

You can enter pitch competitions, apply for business grants, borrow using loans, leverage crowdfunding platforms, and create your own outbound fundraising process. You may even ultimately use several of these channels and strategies.

Start figuring out and short listing those which are the best matches for your unique startup right now. 

Even when you are focused you can face a lot of rejection. The shorter and more efficient you can make the fundraising journey the more profitable it will be, and the more time, energy and resources you’ll have to actually make progress on making the business work. Not to mention how much more enjoyable it will all be. So, make a narrower list to target.

Some of the key factors to look at when it comes to evaluating investors include:

  • Stage of business they are seeking to fund
  • Amount of funding they like to provide at this round
  • Additional help and resources they can provide beyond the money
  • The typical terms they are likely to offer and demand
  • If you are the type of industry and business model they want to fund
  • If you are aligned in values and theory for growing a business
  • If your timelines for an exit match
  • The doors this funding partner could open or close for the next round of funding

Don’t just look at venture capital firms, angel groups, or lender and startup accelerator brand names. It is important to look at the individuals you will be dealing with. Who are the individual partners, board members and decision makers you’ll be interacting with on a daily basis? How good of a match are they?

You may find interesting the video below where I cover in detail how to find investors for your startup.

Start Making Investor Connections

Whether by cold email, in person networking, social media or introductions it is time to connect with investors and begin to build the relationship.

Cold and hard pitches can work. Though the longer you have to build relationships and nurture them and warmly present the more likely you are to get funded. 

Hopefully this piece gave you some perspective on the steps to take to pitch an idea to an investor.

You may find interesting as well our free library of business templates. There you will find every single template you will need when building and scaling your business completely for free. See it here.

The post Steps To Take To Pitch An Idea To An Investor appeared first on Alejandro Cremades.



This post first appeared on Alejandro Cremades, please read the originial post: here

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