How To Pitch To Investors

Companies preparing to meet with investors can improve their odds of raising capital by creating a compelling story and pitching that story to investors.The goal of the pitch is not what you might think.The goal is to peak the investor's interest to learn more.

Focus on the most important points on your business model for the time you have such as the problem, the solution, market size, customers, sales cycle, barriers to entry, IP protection, competition, partners, joint ventures, management, advisory board, financials, uses of funds, and the offer.Take your time to make sure you are clear and understandable to the investors.

Entrepreneurs messaging should articulate their unique value proposition about their target market on how the investor will get a "pay raise" by choosing to invest.The message should be tailored to the investment audience.

-Investors that are in the "business of investing" look for reasons not to invest so they can narrow down the deals they will examine if the company has:

-Incomplete financials and/or business plan

-Complex or confusing message on business model or investment opportunity

-Structure of the offering, relative to a high valuation, unclear exit or return to the investor

-Inexperience or incomplete management team and/or attitude of the management

-A specific industry focus or niche marketplace

Companies often have third parties review their business model documents like the business plan, financials, and offering to:

Identify and examine your market opportunity, your company's role in that market, your competitive and market analysis

- Evaluate your proof of concept and validation of your product or service

- Verify your business has clear business objectives and milestones for financial, sales, customer database, internal organization, and employees

- Identify your business strategies for growth, infrastructure, and development for financial accounting and human resources

- Check for any fatal flaws in your plan that would keep an investor from investing

- Appraise that your concepts are in clear and concise terms that an investor will understand

- Determine if your revenue and financial model makes sense for your business model

- Assess your plan from the investor's point of view, the ability to attract capital at the best value, and meet the expectations of professional investors and lenders.

Companies need a reality check when raising capital.It costs time and money to raise money.

Entrepreneurs must plan accordingly.You can spend a lot of time identifying, scheduling, meeting with each investor and following up and following through.This involves potentially hundreds of meetings and getting a lot of .It is very difficult to raise a lot of money, in a timely manner, and run and manage a fast growing early stage company.

Often entrepreneurs hire an investment banking firm, broker dealer, or professional services firm in that business to help them manage the investment raise process, which costs money.The seed round should be done on your own; with investors you know or have direct access to, without paying any fees.

Once you are beyond their seed round, you need to adopt strategies that will put you in front of hundreds of investors over a reasonable amount of time.This includes participating in business plan competitions, investor forums, and as many opportunities as possible to "pitch" to investors.

There are fees associated with putting these events on and therefore a cost should be anticipated and budgeted for in raising millions of dollars.Entrepreneurs should only pay to present to a group of investors after they have raised a seed round and need access to a new larger pool of potential investors that are savvy about high growth opportunities.

Whether you are seeking $100,000 or $1,000,000, a structured offering should be based on solid inputs from the business model to establish the value of the stock and how much investors will get for their investment.

Documents must be signed and entrepreneurs must establish a legal protocol for collecting the money.That protocol can include a Private Placement Memorandum (PPM), Subscription or Stockholder agreements.These documents explain the opportunity, the risks, and have an investor questionnaire to validate the investor has enough wealth to make the investment.

About the Author

"Where Qualified Investors and Capital Connect with Innovative Companies".

Network of Business Angels Investors (http://nbai.net), and NBAI Private Equity Investor Forums."How to Pitch to Investors" free webinars at http://findinvestorcapital.com and more info at www.launchfn.com

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