Effectively Convincing Investors to Back Your Idea

5 Proven Ways of Creating an Irresistible Package to Attract Investors

By: Barron Boon

It is not easy to do business these days; you have to keep a close eye on revenues and expenses to make sure that your business is heading in the right direction. If somehow you manage to keep business costs low, you can look forward to expanding your business and taking it to the next level. However, when you enter this expansion phase, you may need help from investors to accelerate growth and enter a new stage of profitability. It is not easy to convince investors to provide you the funds needed to take your business to the next level. You will have to learn a few tactics to attract new investors, creating an enticing package, convincing them about your business potential, and showing them your past achievements are some of the tactics you can use to captivate investors.

• Creating a Captivating Business Presentation

The first and most important thing that you need to show to your investors is your business potential and for that you will have to prepare a concise presentation of your business. In this presentation you should highlight factors which set your business apart from the competition.

Make sure that your business presentation follows the structure outlined as under:

• Include 1-2 slides showcasing the essence of your business and highlighting the reasons for the existence of your business.
• Include 2-3 slides addressing the problems/issues faced by your business. Highlight what is “working” and “not working” for your business giving real time examples. You can also shed some light on your values and the potential marketplace.
• Include 2-3 slides about your product/s. Give a brief about all the products/services that you are currently offering and then zero it down to some of the unique features/elements that set your apart from your competitors.
• Include 2-3 slides to demonstrate your go-to-market strategy. Give special emphasis to various methods that you will use to make sales and achieve your targets.
• Include 1-2 slides about your team. Investors give equal importance to your products/services as well as to your employees. Therefore, make sure to introduce your team by highlighting their strengths and core competencies.
• Include 1-2 slides highlighting the financial position of your business. Make sure to include the current financial position as well the projected revenues and expenses, this will showcase your financial planning ability as will strengthen your credibility. This kind of foresightedness can inspire confidence in your investor who may previously have been undecided about offering you their financial support.
• Include 1-2 slides concluding your case. Make sure to include what you are expecting from your investor/s and what they will get in return. Do not forget to thank them for coming and listening to you. A quick question and answer session is the end is a great way to clear any ambiguities that your investors may have about your future plans.

• Establishing An Emotional Connection With The Heart And The Head

Before delivering your killer presentation, make sure to highlight key areas on which you would try to grab full attention and focus of the investors while presenting your case. While presenting your case, make sure to develop a conversation and try to connect with your investors on an emotional level. Do not lose your focus, only describe facts and share information that is pertinent, inspirational and addresses the issue/s in hand and are related to the marketplace. You can even quote some industry publications or news articles to illustrate your ideas.

While communicating your business proposal, try to position yourself as a serious problem solver who enjoys good grip on the business and all the concerning issues/problems. This type of passionate attitude will not only differentiate you from the rest of entrepreneurs, it will also help you establish an emotional connection with the potential investors.

All you need to do now is to connect the dots in a real world context by using real numbers and attention-grabbing visuals. These figures and visuals will help you draw attention of the investors. Another important thing to keep in mind is to be realistic in your valuation approach and clearly demonstrate your competitive advantage keeping in mind the intellectual needs of the investors.

• Repeated Rehearsals

Without doing a lot of rehearsals it will be hard for you to get it right, unless you are a master at presenting business plans and proposals. A great presentation requires more than a deep understanding of your business and the market. Investors do not have enough time to sit with you discussing your future business plans for hours or days. You have to make full use of the allotted time and present your case in such a way that the investors show interest to break a deal with you.

The best way to go about preparing a presentation meeting adequately is to prepare multiple versions of your sales pitch. For time-constrained investors, you can prepare a short elevator pitch that summarizes your points in less than a minute. For that you may have to work hard, because your target will be to get the “ok…can you share some more information” response from your investors. Try including a cliff-hanger or a suspenseful point in your elevator pitch to set a tone for such a reaction.

For those investors who can spare a few minutes, you need to prepare a mid-length sales pitch that can be presented in less than five (5) minutes. Try to put some more “meat” in this presentation and make is more interesting and attention grabbing than the elevator pitch. In order to highlight a particular point in your presentation, engineer your delivery in such a way that the investors are pushed to ask pertinent questions from you. When they ask questions, be prepared to convey your message across in the best way possible. This type of interactive attitude is greatly appreciated by the investors as it shows your grip on your business and your confidence in running and managing it.

Make sure to practice your elevator and secondary pitch repeatedly till the time you feel comfortable that will be able to offer a more tempting insight to your business.  

• Focus Only On Your Immediate Investment Needs

Instead of presenting a big vision of a multi-million dollar business, you need to be realistic and focus only on your immediate investment needs. Keep in mind that it is your initial presentation; you cannot expect your investors to take on such a long-term responsibility.

You should therefore have exact figures about the minimum amount of resources that you need to take your business to the next level. Make sure to seek this amount from the investors at each round of meeting. In order to get a considerate response from them, stick to conservative and realistic estimates only.

• The Exit Strategy

Last but not the least; you have to share a solid exit strategy with your investor/s. Investors are more focused on making money in the shortest possible time, they do not pay as much attention and focus on your products or employees. Therefore, showing them a safe and attractive exit strategy is very important. A five-year investment plan is a good benchmark and accepted by most investors as a safe option to expect some healthy returns. Therefore, you need to design your plan and pitch accordingly.

It is never an easy task to convince an investor; however, with adequate preparation and practice, you can always make a great first impression. The kind of response you get from your investor/s depends greatly on how you present your case. A charismatic, focused, and appealing sales delivery could make the difference between a “No”, “Thank You”, and “Tell Me More” from your investor/s.

By keeping the above-mentioned points in mind while conducting meetings with your potential investors, you could get one step closer to making the investor-funded leap to accelerate your business growth soon.