Top Ten Tips
Top Ten tips for attracting investors
1. It's all about you - You can have a great idea, but investors are looking to buy into you too. Therefore, make sure you grab their attention as well as your pitch, ensure your numbers are realistic and that you're confident in your idea. Investors want to be sure that your idea is in safe hands and ideally, all they have to do is provide the missing funds and await the profits.
2. Be succinct, then detailed – Investors are busy people and they look at many potential new business ideas on an on-going basis. The way to grab their attention is to be sharp, succinct and top the point in your synopsis, so that they can see at-a-glance the essence of you idea. If you can explain it in 100 words and grab the attention enough, Investors will then spend the time to look at the detail, so make sure you tell your story quickly and memorably, before unveiling the nuts and bolts of what makes your idea worthwhile.
3. Keep it high level – When explaining your idea and the concepts that make it the ‘next big thing’, keep your pitch high level and give an overview. The devil is in the detail, but investors won’t get to the detail, if they are not captured by the potential of the idea in the first place. Your proposition needs to be clear, straightforward and logical. Too much detail too early can lose the interest of an investor, so keep it brief and in summary to hook interest before then being ready with the detail.
4. Presentation is key – Imagine two houses for sale on the same road. They’re the same price, same specification but one has been recently decorated and the other needs work – which one would you buy? Investors want to see a finished presentation, with your idea looking as good as it can. A bad presentation will turn off many potential investors, so make sure it’s polished, realistic and shows how the idea is better than the competitors.
5. Be Strategic – It’s obvious that all new business ideas will need a business plan, but don’t just think about the plan as a way to demonstrate the viability of investment; be strategic and look ahead to the bigger picture. Include best case, expected case and worse case scenarios and short, medium and long-term potential, based on gaining the right level of investment and support, so that potential investors can get a sense of urgency or longevity to their investment. A sound product and launch strategy is now a prerequisite.
6. Be an investor yourself – If you are serious about your idea, invest in it yourself. Put your money where you mouth is, as most investors will want to see that you are that confident in your idea, that you have invested money to make it happen. Hire expert help to assist you in developing the idea concept so that you stand a much better chance of gaining significant investment. If your idea is dependant on a invention, develop a prototype; if a brand is essential to your business get branding experts involved – consultants and other experts can make your idea much more attractive and iron out potential flaws before your hit the investment trail.
7. Demonstrate demand – Your idea MUST have an audience willing to buy into it. The best way of doing this is to find potential customers for your product or service and engage with them. If you can line-up potential sales or identify early adopters, you will attract an investors attention. Market research that backs-up and even justifies your idea is essential – so make sure your idea has a marketplace to exist within.
8. Timescales – Gaining the investment you need might take time. You have to know that, when looking for investment, you can’t control the timescales. It’s impossible to know how long it will take to find an interested investor. Even when you do find an investor, it can still take 3-6 months in order to get through the process and turn your idea into reality. Therefore, you have to be patient and prepared to stick it out until the right investor comes your way.
9. Horses for Courses – Investors come in all shapes and sizes and with all sorts of investment levels and specialist areas; however, the modern trend across the board is that investors want to see experienced and competent management teams already in place with a new ideas organisation. So, if you have an idea that is outside of your Demonstratable area of knowledge, you’d be advised to gather expert help in that area and build some sort of team that can help you win the investment you need.
10. Breakeven point – In times of austerity, investors want to gain their outlay back in 6-12 months. They want to see that there’s a robust plan in place and that forecasts can be achieved before they’ll take a risk with their cash. So, plan to keep expenditure under control and be ready to justify the amounts required. Make sure to remember to allow a realistic amount of money to for marketing and have a cash flow model that works at the worse case scenario.