Investing in startups is trending. But not all startups are successful in getting the right investment partner for growth. No matter how great an idea, it depends on how start up entrepreneur is able to successfully sell the idea to a potential investor. It is not the idea alone but the smart communication of the saleability of the idea that changes the game. Ideas are to be created on the basis of the research of the market. Before launching the idea or even before pitching it to any investor, you should consider having knowledge of the required legal clearance and other needed aspects, which will detail the investor about your aimed concern. You will be better in presenting the idea with an expert having by your side, such as IBS which provides valuable legal advisory and Company law services in India. This will make your idea look more prepared and ready to execute, which will interest the investor in investing fund.
Raising funds for business can be a daunting task for any wise entrepreneur. Every entrepreneur is likely to face a healthy dose of rejections. In this edition for Start-ups, we will look at broad guidelines and tips that can help a Start-up build a winning business pitch and raise funds for future growth prospects.Things to note
While the entrepreneur embarks on a mission to garner financial support for his idea, it is pertinent to note some ‘to-dos’ and ‘don’t- dos’ that can impact a business pitch at the initial rounds itself.
- Keep short elevator pitch. You need to convey why an investor should love your idea in the first 5 minutes.
- Have a well-thought out business plan to share, if investors want to delve into it.
- Be thorough with market research. Social page likes don’t translate to no. of users or customers.
- Avoid unrealistic promises about profitability, especially in short run as it can turn off investors.
- Promoter background and experience could be an advantage but investors want to see a product that can stand on its own. It would be best to avoid leading investors with promoters biography than the idea itself.
- Above all, you need to be well-versed with your product and plan and what you are communicating to the investors
With all these points to consider, you will always need to end the pitch with a cherry on the top, that means you need to give the investor something more that appeal to them. You will need to plan the structure of your Business and the incorporation of the same by taking into consideration the location of Business placement. Firms such as IBS India, work closely with these requirements by providing Business structuring services and incorporation of the company in India. IBS also works to design Startup Business Contracts and CFO services in India, that secures your Business in the market.What investors look for in your pitch deck
Investors initially want to know what the start-up is all about and whether it needs to be taken to the next level of discussions. Thus, the purpose of any pitch deck is to stimulate interest and not to bludgeon the investor about every aspect of the start up. Keeping this in mind, the recommended number of slides for a pitch deck would be 10 and can be stretched to a maximum of 15 slides if required. This limit will help organize the thoughts and focus on the absolute essentials for the pitch deck.
Ensure your pitch covers the following:
- Title slide that gives the company details.
- Problem areas/opportunity that the product seeks to address
- Value Proposition of your idea – This could also include the secret sauce or the magic of your idea. Best demonstrated with pictures or prototype, if available.
- Business Model
- Marketing Plan
- Competitive landscape
- Management Team
- Financial Projections and key metrics. If you are the ideation stage, potential revenues to be shown backed with through market research
- Current status and Accomplishments to date
- Funding needs
Start-up entrepreneurs should remember that investors in all probability expect the idea to be similar or a derivate of the many ideas that they come across in the course of their business. The purpose of the pitch is to, therefore present the investor with something they’d like to see. Nothing can be more frustrating for the investor than to be stuck listening to someone without a well-thought out plan. The goal is for the investor to be convinced that he gains from the new venture or partnership. In the end, it is all about – What's’ in it for me?This article is authored by A. Loganathan, representing India Business Solutions (IBS) which is a boutique advisory firm helping a lot of Start-ups in India and Singapore in fulfilling their aspirations. Loganathan is heading the Singapore operations of IBS and can be reached on firstname.lastname@example.org. Website: www.consultibs.in