How to convince investors: the five objectives you must meet in order to win over investors

6th November 2020

It doesn’t matter how brilliant your business idea is, without the perfect pitch it’s unlikely you’ll convince investors. Your pitch is critical to getting you into a room with investors who are sufficiently intrigued to hear your full business plan. So, putting together the perfect pitch requires the right strategy and carefully crafted messaging that contains everything your investors want to hear. Get it right and you can blow away much of the competition and transform your odds of securing investment.

Here are the five objectives your pitch must achieve in order to convince investors:

Objective One: Demonstrate that you’re low risk

Every investment involves an element of risk. Experienced investors will balance their portfolios with investments that carry varying degrees of risk so that they still make money, even if some fail. You shouldn’t shy away from tackling the risks associated with your investment opportunity; instead, you need to demonstrate what makes you lower risk than similar deals.

If you’re still in the early start-up phase, it’s likely there’ll be a good deal of risk for an investor. However, if you use your pitch to demonstrate how you’re a lower risk it’ll help your case. In doing this, you present a credible and viable proposition to would-be backers. If your pitch positions you as capable, credible and viable, you’ll differentiate yourself from your direct competition and be more likely to convince investors and secure  investment.

Objective Two: Make them believe in you

You cannot expect any investor to look at your idea and have blind faith that you’re the person to make it work. Instead, you must give them a good reason to believe in your ability to take this opportunity and make it a big success. Begin by documenting everything you’ve done to date, making sure that you demonstrate how you developed the core skills required for this role.

If you are young or inexperienced in the sector or niche you are pitching in, it’s not a disaster. You just need to prove that you have a team around you who have the desired experience and expertise to help you succeed. Make sure your pitch provides total clarity on your objectives and the validation you’ve got for the idea, all of which is explored in detail when you present your business plan and financial projections.

Objective Three: Give them a vision to get excited about

Let’s not forget that the world of investment is exciting. Investors get to sit down with the architects of ideas that will potentially change the world and shake up our everyday lives through their innovation. Tap into that excitement and craft a pitch that’s full of energy and creates a buzz.

Great entrepreneurs are masters of uniting people behind their vision. If you’ve packed your pitch full of the passion you feel about this idea, it’ll be infectious for investors. Even if the risk is higher than other opportunities, investors may back you because they fall in love with your vision and believe you can make it happen. Don’t present a dry, figures-focussed pitch when you could generate genuine excitement.

Objective Four: Hit the ROI sweet spot

Nobody is suggesting that you waltz into a pitch and slap down a sheet of projections that’ll blow the investor’s socks off with nothing to back it up. Let’s face it, that’s the quickest way to blow all your credibility. However, you do need to show them this is an opportunity with exciting returns.

The trick here is to present a business idea built on credible forecasting without being too cautious about exploring the potential rewards. In your pitch, you should talk about the great potential of this idea without going over the top. Using your target market data and growth strategies to back you up, highlight the exciting possibilities and how far this journey could take you all. Just be sure that you can provide the evidence behind your claims and have given yourself a realistic time frame to achieve everything you’re promising.

Objective Five: Ace your messaging

Throughout your Fundraising Journey, you’ll have to explain your business idea to a lot of people who are coming to it cold. Great pitching is all about excellent communication – the ability to succinctly explain your business idea so that everyone gets it. Time and again, we talk to investors who are baffled by pitches that make absolutely no sense to them and leave them scratching their heads, not ready to sign a deal. One of the most vital objectives of your pitch is to ensure your business is easy to understand.

Two things are standing in your way – your unique perspective and all the ideas you have for the future. Firstly, you know this idea inside out, and things you might believe are crystal clear mean nothing to investors who are arriving at this idea without any context. You need to make sure that your pitch describes the idea with perfect clarity. Secondly, don’t bamboozle the investor with the myriad of ideas you’re planning for later down the line. You need to keep it simple and focus on the first application.

Your pitch deck must deliver clear, concise messaging that any investor flicking through it will understand straight away. Get this right, and you’ll rise to the top of the pile. Go further by crafting powerful messaging that cuts to the heart of what you can achieve, and you give yourself every chance of being in the 1% of businesses that convince investors and win investment.

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Daniel Priestley, CEO and founder, Dent Global and four times best-selling business author

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    2024-06-27T12:32:28+00:00November 6th, 2020|Categories: Pitching, Advice, Investment|