By Kadish & Associates Law Group posted in Closely Held Businesses on Wednesday, November 9, 2016.
If you have been following our blog, you know that many responsibilities accompany the decision to start your own business. A business strategy that establishes procedures for hiring employees, retaining vendors and reaching customers cannot be put into motion without capital. For entrepreneurs lacking in the funds to realize their goals, equity partners can provide financial support to move the business beyond the planning stage.
Although you may offer equity to outside investors, this option alone will not entice investors to open their wallets. As investors usually do not offer money for completely altruistic reasons, you will need to supply a compelling argument that reveals why providing funding will prove to be a sound investment.
1. Research your investors.
In order to tailor your presentation appropriately, you need to know the goals of your audience. If their aspirations parallel yours, you can show that both companies are natural partners. Your business may compliment theirs, extending market reach.
2. Identify the problem your business seeks to solve.
Do customers have unmet needs that your company can address? Is your company attempting to disrupt the status quo? Your business may be able to provide marketable solutions. An examination of the market will reveal the needs your business can address. Presenting data will show your investors that you know what aspects of the market you can exploit for your gain.
3. Create a prototype.
Rather than using abstract terms to describe your product, you will better convey the product’s purpose in allowing your investors to interact with your prototype. Adding a physical component to your pitch will show your investors that you are committed to bringing your plans to fruition. During your presentation, you will need to explain how your product differs from what is available on the market and what makes the product user-friendly.
4. Present evidence of the product’s deployment.
One of the best ways to show that your plan can bring in revenue is to show that customers are already benefitting from its production. Providing positive customer feedback reveals engagement with the product. When you are introducing your product in the market, the initial reaction can help you adjust the prototype to better satisfy customers.
Any episode of “Shark Tank” provides a tutorial in presenting a pitch to investors. Those who seek to invest in a young company may appreciate the spirit of entrepreneurs; however, they are also looking for evidence that their investment will be rewarded. Data, prototypes and market reviews can all bolster a presentation.