For a startup owner who believes in their idea, not having the funding you need can be demoralizing. The execution of your business depends on how convincing you are in winning over investors during your fundraising process. In this article, Scott Crockett, Everest Business Funding’s founder and CEO, shares three of his favorite tips to help you get the funding for your startup in no time.
The statistics are brutal: more than 90% of startups fail, and the second-largest cause of their failure is running out of money. To convince investors that your idea has the potential for a high return on investment, you need a clear understanding of what investors are looking for, an excellent 30-second pitch, and your “why.” People invest in you as a business owner just as much as your products or services.
Tip #1. Know what investors are looking for.
One of the most fundamental principles in sales is that no matter how great your product is, you have to know the buyer. Learning as much as possible about the investors you are presenting your product to is key in winning their attention. Although many investors are looking for a unique product idea, a bright startup founder, and a solid business plan, many investors want to relate to the companies they invest in on a personal level. Savvy entrepreneurs do their research and approach investors who are not only monetarily interested in the business but whose values are aligned with the venture’s mission.
Tip #2. Master your 30-second pitch.
Investors are extremely busy people with a short attention span, so be ready to explain your complex idea in simple terms. You don’t have to practice for hours to get it perfect since you don’t want to sound robotic. The best way to succeed in presenting your 30-second pitch is to demonstrate how your minimum viable product has performed in the past. If your idea piques investors’ interest, be ready to provide them with additional information such as research data, your business plan, investment structure, and so on.
Make sure that your business plan covers essential points, such as:
- Research related to your potential market and perfect customer;
- Any data you’ve gathered so far that is available to make solid financial projections;
- Competitor analysis and what differentiates your product or service from existing competitors in the market;
- Business goals and potential obstacles, along with a plan on how you are going to overcome them;
- Projected timelines for when your business is going to become profitable;
Be ready to speak to all areas of your business and explain your motivations. Investors get pitched ideas regularly, and they understand that there are plenty of multi-million dollar ideas out there. However, if you can prove that you are a focused, motivated, and trustworthy entrepreneur with a solid team to back you up, you are one step closer to securing the funding you need for your business.
Tip #3. Know your “why.”
Enthusiasm and excitement are contagious, and your goal is to believe in yourself and your product to the point where hearing a “no” from yet another investor won’t knock you off your feet. To accomplish this confidence level, you have to have a strong “why” for your business. Entrepreneurs tend to be problem solvers and take advantage of all opportunities that come their way. However, seeing a need for a product or service on the market is not enough to convince investors that you have a strong “why.” You have to have passion for who you are helping, what problem you are solving, and why you are in the business of fixing this specific problem. Investors want to know that you can personally relate to the problem and empathize with customers who need a solution.
Securing investor funding is not easy, but you will be prepared to pitch your business as best as possible if you follow these three tips.
About Scott Crockett
Scott Crockett is the founder and CEO of Everest Business Funding. He is a world traveler and serial entrepreneur with an impressive track record in the finance sector. Scott has raised over $250 million in capital and helped create thousands of jobs during his 20+ year-long career in consumer and commercial finance.