How To Pitch Your Business Idea To Investors

How To Pitch Your Business Idea To Investors

It can be frightening to realize that others will treat your bright idea as exactly what it is: just an idea. No one pays a dime for a great idea. Plenty of people are willing to put their money down for a tested and proven solution to humankind's problems. This is a more complex way to say "something that can make money." Whether you're a first-time inventor or an entrepreneur who's tasted failure more than once, you know it takes confidence to show others your startup's rough sketch. While I won't tell you why you shouldn't pitch your bare-bones concept, I can offer several ways to make your idea more acceptable to potential investors and customers.

1. Put it in numbers.

Numbers will convert more people than an hour of a perfect sermon. Here's what I mean: "There's $70 billion trapped in waste in Africa. Our startup aims to recycle that into cash." This sounds more appealing to prospective investors than, "We want to clean the streets of Kenya."

The typical investor itches to hear how much she or he will get in return for each shilling committed. Not everyone you approach will ask you the question outright. But the most successful fundraising startups know to tell investors just want they need to hear. When you think about how to sell your idea, use figures -- attractive and honest ones at that -- to convey your message.

2. Present the problem first.

Most people won't act unless they have a sense of imminent danger. Simply telling them how cool your startup idea is won't stir them into disrupting the status quo. Suppose your big idea is an app that gets more people to read than to binge watch movies. Telling investors that your app will interrupt people's movie sessions every 30 minutes and encourage them to study might not win your case. This tactic might: Show them the future generation's potential to lead us into recession because they failed to take important economic studies seriously. A problem-tackling approach to marketing relies on the fundamental belief that the customer will buy if the problem is painful enough. You can use this same technique to win over investors and advocates for your startup idea.

3. Give it a great name.

Your brand starts with a title. Naming your idea shows you're serious about the work. Don't let your idea get stuck behind a terrible name. If your idea sounds like a joke to investors, it's probably because the name didn't give you a head start. Most aspiring entrepreneurs take this aspect very lightly. They think their incredible idea should be able to stand on its own. But this stage could be the most vital for your future's startup.

4. Develop a road map.

Don't pitch your idea to investors without tracing a road map on your hand. Don't laugh: Nothing's worse than blankly staring into space when this issue pops up during your pitch. A well-thought-out growth strategy, including a sound marketing approach will sway investors. Your road map should outline the steps you'll take in the following stages, identifying potential obstacles and how you intend to overcome them.
Ideation: If you're shopping for investors, you've already passed this stage. You might need to retrace your steps to this early phase if your potential investors have a justifiable reason for passing on your once-in-a-lifetime opportunity.
Pitching: Your internal strategy should describe how you'll evaluate leads to find the right investors. Pitching your idea to the wrong investors will broadcast that you've started on a wrong footing.
Funding: Take your fundraising strategy very seriously. Let investors see that even if they say "no," you have a realistic plan to raise the needed capital for your brilliant idea.
Prototype: Once you secure funding, how long will it take you to develop the first prototype? You should be able to present a feasible timeline that investors can work with.
Marketing strategy: Without this component in place, don't bother sweating the rest. Most investors won't back a startup without a compelling story and a plan for sharing it -- and that includes an online marketing strategy.
Revenue model: Investors want to see how you intend to recover their money and build on that collateral many times over.
Exit strategy: Even the most brilliant ideas fail. While you might see giving up control of your idea as the last option, investors need to know there's a contingency plan if you fail to save your company. That might be an IPO, an outright sale or something else.

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