If you’ve ever seen Dragons Den, you’ll know that pitching to investors can be just a little frightening (even if you’re not doing it on the telly!) But what if we told you it doesn’t have to be scary? If you believe in your product, there’s no reason why investors won’t as well - as long as you have what they’re looking for. But what is that?
If you don’t love your product, there’s no point in continuing to pursue your business. Think about whether you’re passionate about your business or not, then ask yourself why you love it. Without passion, it’s much more difficult to sell your business in a pitch as investors will be able to see that you don’t really care about your product. For example, an ice-cream maker who doesn’t like ice cream is unlikely to succeed in getting an investor (besides who doesn’t like ice cream!?)
Unique Selling Point (USP)
Every successful business has a good USP - something that sets it apart from similar products in the marketplace. Sometimes what differentiates one business from another is as big as the target market and sometimes it’s as small as a single ingredient in a recipe. It’s important to do extensive market research within your field in order to find out if there is a company out there the same or similar to yours. Don’t be afraid to think outside the box!
Hard Work and Grit
We all love to lie in and sit back and watch Netflix with a Chinese takeaway. But, unfortunately, businesses don’t just happen. They require dedication and determination to make them work. The more work you put in, the more work your investor will be willing to put in too. However, it’s important not to burn out. Hard work is also about knowing when to delegate to your team members and recognising when you need to take a step back and breathe!
No one likes to think about leaving their business when they’re just getting started. However, having an exit strategy is vital to show investors you have a comprehensive plan in place should your startup fail or for if you eventually decide to leave your business. Some common exit strategies include selling the business to someone you know, selling it on to another business or liquidating your business (selling its assets and redistributing them). There’s no one right way of going about it - only you know what’s best for your startup!
As we all know, most startups begin with small numbers. However, investors will be looking for startups that can grow at a healthy rate. They’ll ask questions like how much money you’re looking to bring in five years down the line and whether or not you have the capacity to scale your business. Creating a niche product might differentiate you from other companies, but is there a big enough market to sell it to?
10 Questions to ask yourself before approaching investors
1. What are the risks?
2. Are my financial projections realistic?
3. Are there any holes in my business plan?
4. What is my target market?
5. What value is my product bringing to consumers' lives?
6. Who are my competitors?
7. What success has my business had so far?
8. Does my business match the aims of the investor I am pitching to?
9. What is my brand story?
10. How well is my business doing right now?