Enterprise Investment Partners is a boutique corporate finance house based in Central London. We specialise in tax efficient investments and get approached by hundreds of businesses every year looking for funding. We are typically investing alongside other investors or promoting investments to our clients. Accordingly we take responsibility to ensure that our due diligence and our understanding for any investment that we support is sufficiently robust.
With this in mind, we have drawn on our experience of having hosted many pitch events to assemble a list of our top 10 tips for entrepreneurs when presenting their business ideas to investors.
Using too much technical jargon can cause major problems when pitching. Make sure you can summarise your whole pitch in one sentence (that’s the key take away for your audience) and have a clear structure for any slides so that it all flows like you’re telling a story. Keep it all concise and to the point, giving a strong outline of why your product or service is different while outlining the problems that it solves.
If your audience wants to enter into a more technical conversation, they will guide the conversation. A great way to introduce the details of the product is “Wouldn’t it be great if there were a way to do xyz”? Then spin this into how your product or service solves a very clear issue.
It is risky to assume your audience knows your sector, and if they don’t then this can immediately alienate potential investors. It is important to give a wider market overview as this will demonstrate that you have researched your marketplace and also enable you to show your expertise in the sector.
I was always told to focus investors’ attention on the features and benefits of a deal as opposed to discussing negatives around competitors, and that advice has stood me in good stead when pitching opportunities to other investors. This can lead into Porters Five Forces and barriers to entry, which will seek to further reinforce why your deal is the best thing since sliced bread!
You need to be able to explain your businesses route to market simply and how you are going to attract new customers. An overview of distribution agreements and your market acquisition strategy helps a potential investor understand how your excellent product is going to capture market share, and ultimately make money.
In particular, avoid having too much text on your PowerPoint presentation as this will cause you to read in front of your investors. The purpose of a presentation is for an entrepreneur to demonstrate their knowledge, expertise and passion for their business, and in most instances investors are buying the entrepreneur not the investment! Try and be punchy, concise and to the point.
Too often individuals are completely thrown if their presentation breaks down or their laptop stops working. Ensure that you have a printed copy of your presentation in front of you that you can read through if the technology fails.
This could be the big break for your business and your career. Securing an investor for many entrepreneurs is a defining moment, and therefore you need to make sure that you know your material inside out. That said, investors will want to get a sense of your personality as well, so just reading out materials will probably not be that inspiring. Rehearsing will allow you to know your content while simultaneously engaging with your audience.
How is your product or service going to make money? You need to be able to explain this in a simple and concise fashion. If there are too many variables and jargon, people will get scared away or lose interest. It’s important to be able to give a simple process of how and when your business will start to generate revenues, coupled with projections.
If you have an idea, but no intellectual property protection or a completed product how much is this really worth? Valuation is clearly a sensitive issue, as the entrepreneur does not want to give too much away, and the investor will not want to buy in at what they see as an exaggerated price. That said, if you value your business too highly many investors will switch off or walk away and you won’t even get the chance to convince them that you’re on to the next big thing!
Pitching an investment opportunity is a big deal. Make sure that you take a few deep breaths before you commence your pitch. Investors recognise that this is a big deal and that you will be nervous, but don’t let that detract from your big opportunity!
When you blow investors away with a phenomenal pitch, their next question will be related to your financials. Entrepreneurs already trading need to have accounts in order, and projections need to be realistic. Working with an accountant is an important step to landing your investment and should not be undervalued. Having finalised financials lined up will validate your commitment to your company and help close the deal with an investor.
Last of all, good luck!
The content of this post is up to date and relevant as at 17/03/2015.
Please be aware that information provided by this blog is subject to regular legal and regulatory change. We recommend that you do not take any information held within our website or guides (eBooks) as a definitive guide to the law on the relevant matter being discussed. We suggest your course of action should be to seek legal or professional advice where necessary rather than relying on the content supplied by the author(s) of this blog.
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