You’ve done your research, you’ve got a great idea that’s going to take the tech world by storm, but now you need money to get going.
Pitching for investors is a daunting task. You’ve seen Dragon’s Den, or the trials and tribulations of the Pied Piper crew in comedy Silicon Valley. When you get the chance to speak to a potential investor there’s a lot to convey in not a lot of time.
I, and the rest of our technology team, often meet and talk to start-ups, often seeking their first round of funding. We meet them one-on-one or at various pitching events with other potential investors.
And there’s some good news…it’s not quite as scary and intimidating as it looks on TV.
Investors are looking for good, exciting companies. We want you to do well and we’re looking to help. It’s not an adversarial atmosphere but there are a lot of questions we need answering
So, I’ve compiled a few things we’re looking for that can help you prepare for that pitch:
Know your product
It sounds simple, but it really is important to know your product and be able to explain it to people who may not share the same level of expertise in your area. There’s a popular internet abbreviation - ELI5, explain it like I’m five – you need to be able to quickly summarise what your technology does, how it works and what net benefits that will provide. It’s sometimes a good idea to do just that before you go into a meeting. Have a one-page description of what your tech does and why that’s really beneficial. Make sure you know that inside out. It’s also worth thinking about what questions you’re likely to be asked about your tech and having some FAQ answers ready and at hand.
- How does your technology work?
- How is it different to what’s already out there?
- How will this help people?
- Why would people buy your product/service?
Do your research
If you want to launch your start-up you need to show you have more than just a great idea. You need to know your market and who you’ll be competing against.
- Does anyone do anything similar in the market?
- How do people tackle the issues/ opportunities your product will address at the moment?
- Who is your target market?
- How much are they willing to spend?
- How will you make money off your idea?
Investors like to see that you’ve not only identified the opportunity, but also the competition and any barriers to access.
Know your investor
This follows on from your research. You really need to think who you’re pitching to. This means you can tailor your approach and get the best deal for your start-up.
- Who is the investor?
- What sort of companies do they invest in? Do they have a specialty?
- What sort of knowledge and skills can they bring to your board?
- What are their conditions and terms?
- Will they support follow-on rounds?
An equity investor in a start-up is a long-term partnership. You want to make sure that you can work together and you have the same goals. Getting that fit right is really important. You’re going to be in a lot of board meetings with them over the years and you want to make sure you’re all heading in the same direction.
Who is on your team?
We’re not just backing a great idea with good market potential. When we invest, we’re investing in you and your management team.
- What are your team’s strengths?
- Are there any skill gaps that you’d like an equity investor to help fill?
- Who is your technical officer, your finance director?
- Who is your CEO?
- How long has everyone been with the company?
Look at preparing short biographies of the key team. It’ll soon show if you have any gaps and it often highlights strengths you already have that you may not be utilising fully.
A pitch may be an hour long; it may also only be five minutes. Practice your presenting skills and prepare short, easy to read handouts that you can offer to a potential investor.
If you’ve got a great idea and want to pitch to our team, please get in touch, you can send us a message on our website or call 0800 587 4140.