Raising money from startup investment is a major milestone for any founder. Getting a chance to talk to an angel investor or venture capitalist should be taken seriously. In this post, you may find what you should do to have a great investor meeting.
- Research an investor
Do your homework before you go for any investor meeting. Do a thorough research before you pitch your idea to investors and understand their background. Use public information, such as on their website, through social media platforms, in news articles and more. Know their style, companies they have invested in, their most successful bet and the biggest failure. You must know what makes them tick.
It is also helpful to reach out to other entrepreneurs who may have attempted to obtain capital from them in the past. The more information you can learn about them, the better your chances of success.
- Write your executive summary and business plan
An executive summary will highlight the relevant facts about the company, your products and services, and your target market. Remember to refine your summary based on the specific investor you are trying to target. You absolutely must demonstrate that you have a firm understanding of your market’s size and demographics, and your customer profile. You also must explain your value proposition to this target audience and demonstrate how you are a better option than the competitors.
Your business plan should identify key milestones that you want to achieve with the help of investor capital over the next 18 months. While you need to write this information clearly and concisely, you also need to be able to discuss it during an investor presentation in a more in-depth manner.
While you want to present your potential return on investment in a positive manner, it should also be realistic. Your potential investor wants to hear about your well-formulated growth strategy rather than just a list of projected numbers. Inexperienced entrepreneurs tend to be overly optimistic. Not meeting your milestones and objectives can be detrimental to your ability to generate future investments. Always back your expectations up with real data.
Your investor will be willing to put money only if you show them how your business idea will fetch them money. You must prepare a forecast quarterly financial model over the next one, three and five years before your investor meeting. You should also sketch out a monthly financial plan for the first eighteen months to offer a clear picture of your finance to your investor.
Explain your money-making strategies clearly to your potential investors. You must critically scrutinize your revenue model and should have a back plan. Being disruptive is not enough, you must show the investor how putting in funds in your business model will help him.
- Prepare and practice your presentation and pitch
Your pitch deck should categorically state the key aspects of your business and product. A document nicely presented shows the hard work and gives the impression that you are well prepared for the meeting. The first three slides must be brilliantly done to catch the attention of your potential investors. You may also include some visual graphics and images. Besides that, it also ensures if either side misses a point in the discussion, it’s there on the deck.
- Estimate how much money you will need and what for
Know where the money is going. It’s the number one thing that startup investors want to know. How will this investment contribute to the overall success of your organization? How will the application of these funds contribute to the success of the startup? Answers to these important questions will help your startup from appearing directionless and lost.
- Have a Q&A session with a hostile audience
Potential investors are going to ask a lot of questions. The key here is to be honest with them, foregoing any bluster or pretending. As a young company, there will be many things to figure out. Don’t cover up your uncertainty by lying to or overpromising an investor.
Being able to recognize your company’s current limits or unforeseen changes means you can look at your state of affairs through a realistic lens.
Your first few investor presentations may not go precisely as you planned, but remember that they are each learning experiences that can help you to grow. After each meeting, take notes about your experiences, and brainstorm things that you can improve on to prepare for your next meeting. It may take you several attempts, but your knowledge and confidence level will increase with each meeting.
Want to learn more about investing? startAD hosts an annual symposium called Angel Rising. Learn more by clicking the button below.