Raising capital from investors is not an easy process. Just because you think your business is great doesn’t mean an investor will. When pitching investors you need to show them why they show invest with you. It needs to be more than a good idea. The good idea needs to be enveloped in layer of strong management, professionalism and solid plans of how the business will operate in the future.
Below are the three main areas you should concentrate on when seeking pitching investors.
You need to make sure you’re prepared when pitching investors
The cornerstone of the your capital raising endeavours will be the information memorandum. The information memorandum in most cases will be the introduction to the matter for the investor. The information memorandum provides a concise overview of all facets of the business, the market opportunity, the offer and the use of investor funds.
Needless to say the information memorandum must be professionally prepared. The content is obviously key. The information memorandum is a marketing document, although is put to higher standards. Every statement made in the information memorandum must be able to be validated. At the same time it must be written in a manner that demonstrates the enthusiasm and passion of the directors.
The Pitch Deck is another tool that is good to have tool bag. The Pitch Deck summarises the information in presentation such as Powerpoint or Prezi. Generally 10 – 15 slides long it is designed to give a ten-minute punchy presentation. Ideal for pitching investors in a time limited environment. Of course the discussions resulting from the slides could go on indefinitely.
Away from the presentation there are other elements to the capital raising journey. Investors who are impressed with the presentation will want further evidence to substantiate the claims made in the presentation. Investors will ask for and expect all financial and other substantiating documents ready for inspection. Many deals are blown during the due diligence period.
It may necessary for the investor to have access to various people including key customers and other stakeholders.
The information memorandum will have the future vision of the business and outline the Use of Funds invested. However the investor will want to see the directors have a clear plan of how the business achieve the vision. This is typically in the form of a business plan. The business plan should have a detailed plan for the investment and the resources required to implement the plan.