Attracting funding for your startup
Let’s start at the beginning. You are inspired by a great idea you believe in deeply, and, want to convert that into a business. Simple? Right? Nope, totally wrong!
Ideas are common place! We all have ideas which in our opinion will change the world or be a great success – socially, financially or something else. That is a good start. You are positive. That is the first check box in your corner.
Many ideas never take off, it remains on paper and will not see the light of the day! If your funding it yourself, good luck to you. However if you require funding from an investor to convert your idea to reality, here are some pointers to help bringing it in.
The first thing you need to realize when you seeking funding, is not about only dollars and cents. Presenting your idea to a various groups of individuals, fund managers will expose you to all the some great questions, problem areas you may have not considered, suggestions that you can incorporate into your next presentation. Individuals and groups who fund try to be as critical as possible to your idea, leading to many failed meeting (they did not agree to fund you!) – it should not be a deterrent but inspire you to make your pitch better when you meet the next group of investors. You may have to make many presentations, sometime 50, or 100 before you are successful. As your go from one fund to the other, your ideas become more concrete, you get better prepared to answer questions and your presentation improves.
So what should you consider to be part of your presentation. Here is a short list.
An overview of your business idea (one or two sentences).
A description of your product and/or service. What problems are you solving for your target customers?
Your goals for the business. Where do you expect the business to be in one year, three years, five years?
Your team and their prior experience. What do they bring to the table that will give your business a competitive edge?
Your proposed target market. Who are your ideal customers?
Your competition and what differentiates your business. Who are you up against, and what unique selling proposition will help you succeed?
Financial outlook for the business. Explain how much money you want, how you will use it, and how that will make your business more profitable.
Exit Strategy. How are your investors going to get their money back? When? How – IPO or sell the business etc.,
Making an attractive presentation is a pre-requisite – Seek professional help if required. The attention span of an investor is very short – remember they are evaluating more than a hundred proposals every month, sometimes more and will only focus on an idea or product that fits their criteria. I have seen investors listen to 10-20 pitches every day from potential entrepreneurs, some pitches lasting only 15 minutes, so the rejection rate is very high if you are not able to hold their attention. Doing a background on the investor is very important to understand how you will pitch your proposal. Remember, an investor is not just a financial asset. They bring in value in terms of contacts, access to technical pool of professionals, oversight, help you market your product as they are heavily networked.
There are several templates available on the web and you can adapt one of them to showcase your idea. Here is a good agenda you can build to start off the conversation with your investor.
Whatever you do – ‘be persistence, patient and believe in yourself‘ – this is the key to a successful pitch.
Good luck with your startup!
Authored by Vijay Chander – All rights reserved 2022
