Pitch Your Ideas To Investors With These Answers, Watch Them Get Blown Away
Having to face a panel that would leave no stone unturned when scrutinizing your business idea or proposal is not exactly the easiest task in the world. It takes an insane amount of composure and belief in your plan to make your pitching perfect. Composure may not be enough sometimes and questions may arise that would raise doubts about the viability of your idea.
Entrepreneurs need to learn how to give the right answers to these questions , whether written or otherwise, in order to attract investors.
Here are a couple of key questions and answers that you surely can't go wrong with.
What Problem Are You Solving ?
Cliche as it sounds, it is one question that many still find hard to answer. Sure, your idea and technology may be innovative and exciting, it doesn't necessarily mean a successful business can be built around it. In today's world, too many people have learned to think outside the box and this has created more solutions than there are problems. What investors really want to know is if there is one or two or three customers out there who are willing to pay money to solve a problem they have with a solution you can provide.
How Does Your "Innovative Idea" Translate To Money In The Bank?
This is the ultimate question. Investors are only interested in return on investment and would really want to know how your business model will make money. You have to unequivocally define who your customers are, total revenue expected versus total expenditure, and investment required to sustain cash flow.
How Much Funds Do You Need And How Much Equity Are You Willing To Part With?
Here, you will have to justify your current funding requirements, state in no unclear terms where every cent of the money will go, and specify the current valuation estimate. Since the investors are interested in buying into your company (not your products) they would want to know what percentage of the company they'll be getting.
Who Are Your Competitors And What's Your Unique Selling Point?
There is nothing new under the sun, therefore, it would be ridiculous to believe there is no competition. Start by naming your top three competitors, outline the barriers that new start ups face and tell them the advantage/edge you have over existing ones.
How Qualified Is Your Team?
Investors are more interested in the hands they are giving their money to than the idea to which the money is being giving. Capable hands, more often than not, guarantee success . Investors need to know your team possess the key skills, experience and industry connection to make the business successful.
How Big/Growing Is The Total Market And Target Area?
Investors will be looking for a sizing validated by industry analysts large enough for good investment returns. They like billion-dollar markets with double-digit growth rates. They expect to see focus, and evidence that your data is based on market experience and expertise.
What Are Your Forcasts For Future Revenue, Expenses and Cash Flow?
Forecasts of revenue go a long way in convincing the investors of your commitment to the business. The numbers should be ambitious but not unreal or irrational , based on market size and conditions.
What Is Your Specific Solution And Value Proposition?
Investors are looking for a concise description of your product or service without technical jargon or fuzzy marketing terms with value quantified in customer terms. This is also the place to first mention patents and any other differentiators that put you ahead of competition.
When Is Our Pay Day And How Much Do We Get Paid?
It is at this point that you begin to talk about merger and acquisition or initial public stock offering. They need to know you have a planned liquidity event. You should find a comparable existing company and evaluate their potential sale value and return on investment.
There's no understating the value of simplicity. Most people prefer to read the right points in as short a time as possible. The best business plan doesn't have to be the longest. A well written 5 page plan may be as, if not more, effective as an ambiguous 1000 page plan.
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| The Perfect Pitch |
Entrepreneurs need to learn how to give the right answers to these questions , whether written or otherwise, in order to attract investors.
Here are a couple of key questions and answers that you surely can't go wrong with.
What Problem Are You Solving ?
Cliche as it sounds, it is one question that many still find hard to answer. Sure, your idea and technology may be innovative and exciting, it doesn't necessarily mean a successful business can be built around it. In today's world, too many people have learned to think outside the box and this has created more solutions than there are problems. What investors really want to know is if there is one or two or three customers out there who are willing to pay money to solve a problem they have with a solution you can provide.
How Does Your "Innovative Idea" Translate To Money In The Bank?
This is the ultimate question. Investors are only interested in return on investment and would really want to know how your business model will make money. You have to unequivocally define who your customers are, total revenue expected versus total expenditure, and investment required to sustain cash flow.
How Much Funds Do You Need And How Much Equity Are You Willing To Part With?
Here, you will have to justify your current funding requirements, state in no unclear terms where every cent of the money will go, and specify the current valuation estimate. Since the investors are interested in buying into your company (not your products) they would want to know what percentage of the company they'll be getting.
Who Are Your Competitors And What's Your Unique Selling Point?
There is nothing new under the sun, therefore, it would be ridiculous to believe there is no competition. Start by naming your top three competitors, outline the barriers that new start ups face and tell them the advantage/edge you have over existing ones.
How Qualified Is Your Team?
Investors are more interested in the hands they are giving their money to than the idea to which the money is being giving. Capable hands, more often than not, guarantee success . Investors need to know your team possess the key skills, experience and industry connection to make the business successful.
How Big/Growing Is The Total Market And Target Area?
Investors will be looking for a sizing validated by industry analysts large enough for good investment returns. They like billion-dollar markets with double-digit growth rates. They expect to see focus, and evidence that your data is based on market experience and expertise.
What Are Your Forcasts For Future Revenue, Expenses and Cash Flow?
Forecasts of revenue go a long way in convincing the investors of your commitment to the business. The numbers should be ambitious but not unreal or irrational , based on market size and conditions.
What Is Your Specific Solution And Value Proposition?
Investors are looking for a concise description of your product or service without technical jargon or fuzzy marketing terms with value quantified in customer terms. This is also the place to first mention patents and any other differentiators that put you ahead of competition.
When Is Our Pay Day And How Much Do We Get Paid?
It is at this point that you begin to talk about merger and acquisition or initial public stock offering. They need to know you have a planned liquidity event. You should find a comparable existing company and evaluate their potential sale value and return on investment.
There's no understating the value of simplicity. Most people prefer to read the right points in as short a time as possible. The best business plan doesn't have to be the longest. A well written 5 page plan may be as, if not more, effective as an ambiguous 1000 page plan.
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