While a good business idea paves the way for a successful pitch, there are several aspects to consider when it comes to securing funding - one of the most important being the preparations for the actual pitch. This is often applicable for both equity and debt investors.
From doing your research to the actual presentation, here are some go-to tips for perfecting your pitch.
It doesn’t matter if your idea is brilliant, but not something your investors are looking for. As such, it’s important to be thorough during your research, to ensure your idea/ product caters to their needs. Find out more about the other types of businesses they invest in and the degree of involvement. Having knowledge of your investors is often half the battle won, and this step ensures that you’ll be as prepared as possible. Some investors or lenders may have a niche in certain industries that you are in which could help bridge conversations and allow you to get technical in your conversations. Remember, investors ultimately only fund businesses they can have visibility and understanding in.
A pitch comprises many different segments. As strange as it may sound, the objective isn’t to raise money. Given how investments are rarely (if not ever) secured in one meeting, the pitch would allow investors to understand what you do and to pique their investors’ interests in your idea or company.
Before jumping straight to talk about your idea and what it can do, take a moment to explain the need for it. Use this time to also give a description of your business, preferably in a clear and succinct manner. The first impression counts, so make sure to maximise the opening of your pitch.
Now that the investors have more context, proceed to identify the issue and existing solutions in the market. When doing so, it’s helpful to make the challenge as relatable as possible, such that the investors are more capable of understanding your business vision.
With that, you can lead to the solution you’re bringing to the table. Be sure to describe your product/ service and how it solves the issues. Wherever possible, reference this segment to the problems that you have previously identified and explain how your business can help. This can be coupled with a demonstration of your product or service, to really make an impression.
Expand on the current market size and who your target audience is. Information such as the worth of the current and potential market are things investors look out for, so make sure you’re prepared to back your pitch with relevant data. Show that you understand and have analysed the needs and behaviour of your target audience. It can be handy to develop a persona, to help investors better visualise your intent. With your target audience developed, it’s a good time to talk about the marketing strategy and how you intend to reach your customers. Consider looking at different market segments and how different product offerings or marketing will be utilised, to cater to the different segments. Remember, keeping your market large may be persuasive, but keeping your reach realistic should take precedence.
What ultimately attracts investors is revenue generation. Ensure that you walk into the room with a business plan/ model and preferably, an outline of returns. Don’t be afraid to go down to details and elaborate on how your pricing will fit into the market. Reference the competitive landscape and explain if what you’re providing is a budget offer or a premium.
As you’re nearing the end of the pitch, don’t be afraid to outline your milestones and achievements. Whether it’s sales or content engagement rate, build your credibility by mentioning the traction you’ve made thus far. Share your marketing plans and how you intend to source for, win over and retain consumers, given how these are some of the biggest challenges for entrepreneurs.
At this point, take some time to talk about your funding needs, existing investments, and how you intended to proceed. Explain why you need the amount of money and what your plans are. Prior to this, consider setting an outline of your sales, total expenses and profits for context. Be prepared to discuss how you intend to achieve your sales goals and your key expenses.
Lastly, prepare answers to potential questions the investors might raise after (or even during) your presentation, to give the impression of a well thought out pitch.
So a quick summary of your pitch should include:
1. Executive Summary
2. Problem Statement
3. Solution Description
4. Market Size
5. Monetisation plan
6. Key projections
7. Funding Requirement
We’ve all heard of the elevator pitch. Similarly, keep your investors’ pitch as clear and memorable as possible. While data can be used to support your idea, avoid overwhelming the room with too many numbers. Keep your points and deck salient - if you have to elaborate, keep the elaboration in your talking points and out of the deck.
As confident as you are of your idea, one can never have too much practice. In addition to going over your presentation, make sure all technical aspects such as loading of the pitch deck and demonstrations are prepared for.
Time is the most valuable asset next to money. So before stepping into the room, make sure you’re prepared to make the pitch. Remember, there’s no such thing as being overly prepared.
Ultimately you don’t want to be giving out equity so quickly at the start of your entreprenueral journey, start with some of your own capital and pair it with some affordable debt financing. It is unlikely you will qualifty for a business loan unless you have some operating revenues but if you are still employed, get a loan against your income first. Banks typically offer personal loans at rates of about 6-7% p.a. and they can stretch out to 5 years. In terms of quantum, the amounts could range from 3-8x your salary depending on your salary bracket. While banks mostly don’t require a pitch, we’re sure being prepared will still get you far with friends and family who will likely be your first investors.
All the best!
Leading digital loan marketplace Lendingpot connects SMEs to its network of 45 lenders comprising relationship managers from banks, financial institutions, and private and peer-to-peer lenders in Singapore for free. It aims to help SMEs overcome the information asymmetry problem and lack of transparency prevalent in the SME financing sector by offering SMEs financing options such as business term loans, property loans, revenue-based financing, credit lines, working capital loans, bridging loans, invoice financing, and more.
Adeline is a content producer who dabbles in writing and photography. She’s also a bit of a history geek, and is glad to dish out facts nobody asked for.
