Entering entrepreneurship can be an unnerving experience, fraught with peril and uncertainty. But it can also be an exciting pivot in your life. First-time entrepreneurs can help lessen the risk and uncertainty when they bootstrap their own ideas. If you truly want to be an entrepreneur, create something to sell as quickly as you can and then get to selling. This is one thing that you cannot master without experience behind you- getting your hands dirty and ‘pounding the pavement’ is invaluable.
But the reality is that as your business grows and gains momentum, there are certain objectives that will require investor funding. No matter if you have a new concept to add to an existing product line, or you’re humming along and you want to accelerate growth, acquiring mentorship or funding from an expert can help you meet those goals.
This article will outline the best steps to take as you pitch your business to investors so that you can successfully move forward.
Understand the Perils
Any time you choose to engage in any sort of relationship, there is an inherent risk involved but this is especially true of business partnerships. If you envision having a long term relationship with investors, the time to be abundantly clear on everyone’s roles and responsibilities is now.
It’s in your best interest to pitch investors for a one-time loan paid back with interest. However, if they ask for equity offer them enough for them to make a solid return on investment, but not enough to claim any significant stake in ownership.
Acquiring investors can take your business further than you ever imagined, but you also need to proceed with caution. The wrong partnership or business agreement can threaten your position as a leader and key visionary for your business and you want to protect that with everything you’ve got.
Your main goal while pitching deals is to find investors with offers to help while allowing you to remain the key decision-maker. As an entrepreneur, this is incredibly important. Don’t let the success or status of any mentor or investor change that.
The fear of failure can be crippling- don’t let it lure you into a false sense of security thinking that an investor is a savior that’s here to rescue your business from adversity. That’s your job. You can’t let the idea of adversity or failure deter your vision– whatever pitfalls lie ahead are teachable moments to learn from on your entrepreneurial journey. You’d be doing yourself a disservice and standing in the way of your own professional growth if you don’t push onward and face them yourself.
Focus On Relationships First
If you want to pursue investors or mentors, you must understand that this pursuit is one that is a long-term game. Investors will rarely jump on board with a newly-minted entrepreneur with a single pitch.
When you’re just getting started and you get the opportunity to speak to an industry expert or investor, it’s worth it to take a step back and not lead in with a pitch. This may seem counter-intuitive, but pitching right out of the gate can set the tone for a transactional relationship. You should avoid this at all costs- at this stage, you’d be unable to afford to buy out the investor’s stake.
Instead, head into initial meetings focused on building genuine, quality relationships with experts and investors first. Once you have their attention, ask them how you can help them first- and don’t expect anything back.
If possible, do your due diligence, find out what their needs are, and give it to them before they can even ask for it. At this point, your goal should be to set yourself apart from the droves of wantrepreneurs who assault experts with pitches every day.
Proof Your Concept Before Pitching
This is a true tell- the masters who craft successful pitches are able to do so because they can show a prospective investor or mentor that they already have a pool of qualified prospects. If you can demonstrate that you have an engaged audience who is eager to buy, investors will have a hard time saying no to your pitch
When all is said and done, successfully pitching your business to an investor or mentor comes down to the same basic principle that you use when selling to customers: create certainty and trust in that your offer will be successful. There is no better way to establish trust than to demonstrate the proof of concept right in front of them. Identify these demonstrable moments and you’ll attract investors that will elevate your business to meet objectives so you can start building your empire.