Having a solid pitch is essential to show that you know your business inside out. Below are our top tips for how to create a winning pitch for investment.
What is an investment pitch?
An investment pitch is a presentation given to potential investors to explain why they should invest in your project or business. It typically includes an overview of the company, its products or services, its market, its competitive advantages, and its financial projections. The goal of an investment pitch is to persuade investors that your project or business is a good investment opportunity.
An investment pitch is important as it allows you to communicate the potential value and benefits of your business idea in a persuasive manner. It also enables potential investors to quickly assess your business and decide whether or not to invest. A well-crafted investment pitch can be the key to securing the necessary funds to launch a successful business.
What type of investor is best for my business?
Before creating a pitch, it is important to know who you are pitching to. There are a few different types of investors, however the two most common ones are venture capitalists and angel investors. You must tailor your pitch depending on the investor.
Venture Capitalists will be acting on behalf of a group of investors and so will have a strong obligation to make well-thought-out and researched decisions. Therefore, they will be very interested in the numbers and details of your business. You are going to want to pitch to Venture Capitalists if you are looking to expand your business or for networking opportunities. Venture Capitalists will have a strong network with more partners and resources.
If your business is still in the very early stages and you are still building your business, then you will want to pitch to Angel Investors. This is because they are more likely to invest in a company even if there is little proof it will bring a return. Pitching to Angel Investors will still require a well-planned pitch, however, they are less interested in the numbers. As Angel Investors act alone, they do not need to confer with anyone else and so are more likely to make quicker decisions. You will want to focus more on the bigger picture, including the market share your business holds.
How long should my investment pitch be?
It is likely that the investors you have set up meetings with will give you an allocated meeting time, usually lasting between 10 and 20 minutes, although they can be longer. It is important to tailor your pitch according to your allotted time. Your 10-minute pitch should not be the same as your 20-minute pitch. It is also important to leave time for a Q&A.
How should I create a winning pitch for investment?
Write an introduction
Your pitch may start with a short introduction, summarising what you will be covering. It is important the investor has a clear understanding of your business and goals before you go on to talk about why you need their investment.
Tell a compelling story
Once you are all on the same page, you can go on to tell a compelling story about how your business was founded, including the problem you noticed and how you fixed it. You will also need to include data, details and numbers to support your story.
What problem are you addressing?
What is the current problem in the market, and what are the pain points customers currently experience?
What is your solution?
How does your product/service solve this problem? You want to give details of your solution and explain why customers will use and demand your solution over others.
What is your total addressable market?
It is also important to include the size of your total addressable market. This refers to the maximum amount of revenue your business could generate in a specific market. Investors will be able to tell if the number you give has been inflated so it is essential you are realistic with the number you present. You will also be expected to show how you calculated this number.
Conduct a competitor analysis
Every business will have to compete with at least one other. Even if you are first to market, you will be competing for consumers to spend their money on your product or service over another. You will need to provide a thorough competitor analysis, demonstrating all the strengths and weaknesses of the competition.
What is your business model?
This is where you show how you create revenue – what is your pricing and proposition for each type of customers?
Outline your marketing strategy
Investors will be interested in learning about how you plan to bring your product to market and attract new customers. You will need to describe your marketing strategy, whether that be through content marketing, trade shows or direct sales.
What are your growth plans/timeline?
What do you plan to achieve over the next 3-5 years? What are your key milestones?
What is your team like?
Who are the key team members and advisers? The team is key information investors look for as this is the biggest resource which determines whether a business will be successful or not.
Finance and Forecasts
A finance slide is key to show what the growth of the company will achieve in terms of revenue and profit. This slide is a culmination of everything you have pitched to the investors, showing what you can achieve if you receive the investment.
How much investment do you need?
The next step is to clearly outline how much investment you need and how you intend to use it. It is imperative that the investors can see you have carefully and strategically planned how much funding you require. You must outline how much you need, how long you plan for it to last, what you will use it for and where the business will be after the money runs out.
Analyse your potential risks
When pitching to investors, you want to show your business in the best light to prove that you are worth investing in. However, investors need you to be realistic so they can make a fully informed decision. Due to this, it is necessary that you include a risk assessment for your business. You will need to include legal risks, technological risks, regulatory risks, political risks and liability risks. You will need to be prepared to explain how you will approach and mitigate these risks.
Provide a demonstration
If possible, it is always best to include a demonstration of your product. This will allow the investors to experience your product first hand and hopefully understand and share your vision.
Which investor should I pitch to first?
As with anything in life, practise makes perfect. It is unlikely that you will deliver your first pitch successfully and so it is important not to start with your ideal investor. Meeting with lots of investors will allow you to learn how to pitch and what questions to expect. You can then take this learning and apply it to your future pitches.
What should I do after I pitch to investors?
After you have finished your pitch, it is always nice to send a follow up note. This should be a genuine thank you to show your gratitude and will hopefully keep you in their minds.
Creating a winning pitch for investment can be a challenge, requiring careful planning and research. Give yourself the best chance of success by understanding the investor’s goals, analysing the competition, and developing a well thought out pitch. By using storytelling, visual aids, and a clear, concise presentation, you can grab the attention and interest of potential investors. With the right strategy and practice, you can create a winning pitch for investment.
How can Newable help?
Here at Newable, we have a team of experienced advisors passionate about helping SMEs by providing fully funded advice. Find out more about how Newable can help you create a winning pitch for investment.
We can also help you in other areas of your business. Whether it be Money, Advice or Workspace, Newable provides the essential resources businesses need to take the next step.
Find out more about how Newable can help you and your business.
Read our other blogs in this series:
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5 top tips to help make your business reach net zero
What does the rise in interest rate mean for SMEs?
Top 7 Benefits of Shared Workspaces for SMEs
Why SMEs should have an ESG strategy
How to Choose the Best Workspace for You