Having an investor’s funding, whether from Peer-to-Peer Lenders, Personal Investors, Banks, Venture Capitalists, can go a long way in taking your business to the next level. However, in this article, I will be focusing on VCs and how to impress them.
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Investors are very serious-minded people. They have worked their way up to the business ladder that they are hardly patient with unfruitful ventures or people. You must have this at the back of your mind that investors can support you all the way, even beyond your expectations if you impress them. If you must have an investor’s support, you must look investable.
Investors come from all walks of life, and your pitch must be able to fit into their interests. In this article, I recommend 7 proven ways to impress your prospective investors.
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Presenting Your Margins
The biggest truth you need to know when attempting to pitch an idea is that investors are not going to invest in your business because your business idea is noble; investors might not necessarily invest because they believe in your vision. Although, it can inspire them, they are not primarily moved by your vision. They are simply investing because they want to make more money. So, don’t beat yourself on how to sound nice, but on how to sell your business as a profitable venture. Therefore, investors want to see the numbers, the profit margins and how you have progressed in your profit output in the past.
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Show Them Growth Potential
Investors are likely to throw in their weights behind you when they see the sustainability features of your business. Therefore, present to them the possibility of your business generating revenues in increasing proportions in the next 5 to 10 years. Pinpoint the marginal growth of customers in the coming years. To please investors and have them throw their weights behind you, you should be able to illustrate the growth potentials, such as the possibility of entering new markets, increase adoption of your solution/service/products in the future, progressive revenue and so on. Investors are interested in seeing how their money will bring huge ROI in the future.
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Present A Detailed Business Model
Another thing that attracts investors’ funding is a clear business model. Having a clear business model means a business system and structure that can make the business run effectively. Your model should be a plan for the successful operation of the business, specifying sources of revenue, the intended customer base, products, and details of financing. The model must be scalable and replicable.
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Illustrate How Your Business Solves A Problem
If you are going to get investors’ backing, you must be able to explain in the simplest term what problem your business solves or is out to solve. The problem should be something that affects a large group of people, because it means the larger the group, the greater the opportunities and dividends. However, the most important thing is to offer a simple solution to a complex-wide range of problems.
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Demonstrate That You’re Unique From Your Competitions
Another way to impress investors is to demonstrate that your solution/service/product marks you out from your competitors. You must show prospective investors that you have proprietary ownership over some part of your business – that is, you have what your competitors don’t have and can’t replicate. It is a demonstration of your competitive edges which could include patents, trademarks, and copyrights. However, trademark and copyright laws are less favourable for small businesses, so they don’t hold as much weight as a patent does. If you don’t have any of these things, you can still ascertain an edge using innovations.
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Show Them That You Have The Best Team
Another way to create an impression in the minds of investors is to highlight the strengths and passions of those who make up your team. Point out their talents, experiences and contributions to the growth of the business. Investors are very interested in those who are driving the business. They are interested in knowing if they are passionate, talented, experienced, responsible and productive enough to pull the business to the expected heights.
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Demonstrate How You Connect With Your Customers
Last but not least in impressing your potential investors is how many repeat customers you have. This goes a long way in showing how competent your business is at retaining customers. When repeat customers are progressive, it is an indication that your business has high approval ratings in the market.
Featured Image Source: Nairametrics
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This article was first published on 6th January 2022
nnaemeka-emmanuel
Nnaemeka is an academic scholar with a degree in History and International Studies from the University of Nigeria, Nsukka. He is also a creative writer, content creator, storyteller, and social analyst.
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