We all start somewhere, and we’ve all made mistakes that make us cringe just thinking about them. While I wouldn’t give up any part of the journey that’s brought me from working your typical corporate job to being a successful entrepreneur, I’d be lying if I said that I wouldn’t change a few things. Namely, I’d change almost everything about the way I pitched my first proposal to an investor.
Back then, I had a great idea, and I thought that was all I needed to be successful. While I wasn’t far off, I definitely needed a bit more knowledge going into that pitch than I had at the time. If I’d known just a few more things about how to talk to investors and how to make a convincing proposal, I’d be patting myself on the back instead of cringing and chuckling at my naiveté every time I think of that day.
YOU NEED A BUSINESS PLAN
First, when you walk in to talk with an investor and make your pitch, you need a business plan. Having a good business plan shows that you’ve put some time and energy into this idea and that it’s not just a whim. It also gives you a good reference when your investor asks you about your startup and why you think it will be successful.
If you have a business plan, you can refer to concrete numbers and show investors that you have contingency plans and exit strategies. You’ve thought about how your business can fail, what kind of market it has, and whether or not it’s scalable. Having all of this information won’t guarantee that an investor will think your idea is worthwhile, but it will give you a better chance.
PRACTICE, PRACTICE, PRACTICE!
I didn’t think I was going to be nervous when I made my first pitch. I was confident in my idea, and I knew that any investor should want it, so what was there to be nervous about? Then, as I walked through the door, those nerves hit me at the very last minute and I was a mess. This happens a lot more often than you might think, but if you practice your pitch until you have it thoroughly memorized and it comes completely naturally to you, it won’t matter how nervous you are.
And don’t just practice your pitch like it’s a canned speech. Rehearse your proposal with a friend. Have them pretend to be your investor and ask you questions about different aspects of your idea, what it can do for them, etc. The more you practice this way, the more at ease you’ll feel answering questions from a real investor.
FOCUS ON THE BENEFITS OF YOUR INVESTOR
Finally, a lot of new entrepreneurs make the mistake of focusing on what the investor can do for them. Your investor knows what they can do for you—they can back you financially so that you can start and grow your business. Your pitch should tell them what you can do for them. How will they profit? When can they see returns? Will they be a shareholder in the business, or will this be a loan to be paid back by a certain deadline
I didn’t know these three things when I made my first pitch to an investor. I had to learn them the hard way, but you don’t have to do that. You can take this advice and tailor your pitch so that it’s most likely to succeed. Good luck!