The wave of Startups has hit the entire world, including India. We often have brilliant business plans, but not enough funds to execute them. Such is the time when we approach investors with a brilliant elevator pitch. But why would the investors invest their funds for our ideas?
How do we make them realize with an elevator pitch that investing in our business plan is beneficial? And how do we convince them that our business would be profitable in the long run?
Investors, before investing in any company or a startup looks for their benefits they can get out of the deal by the way we present our startup's business plan. To understand how we get the funds we require, we need to know what investors look for before investing.
What do investors look for in your Business?
1. Market Growth
The first thing an investor looks for is the market growth of your company's operations.
Higher market growth ensures higher returns. Every investor who invests in your company expects profit in return. And the slow-growing market doesn't guarantee higher profits.
2. Strong Management
The investors feel secured if your company has a strong management team that looks after the marketing, sales, and finances of the company. A good marketing team brings a rise in sales. The surge in sales leads to an increase in profits.
3. Good Business Plan
A good business plan is not what looks good and impressive on paper, but it must be practical and executable. A business plan you draft must be such that you can bring it to life. Only mentioning modern business techniques would be of no help if you cannot explain the execution of such methods.
4. Maximum returns on investment
When an investor invests in a startup, he would want to know what returns will he be getting in about 5-10 years. This is the crucial factor that decides whether he would invest and if yes, how much.
5. Impressive Leadership
You are going to represent your company. You must be confident about your plans and the overall concept of your startup. Investors tend to believe in you if you can assure them of your credibility and impress them with your charismatic personality. Charisma marks a positive, impactful impression.
Pitching your Idea to the Investors for Funding
You must present your concept and plan behind the startup effectively in your elevator pitch to convince your investors to trust you and invest in your startup. No investor would be interested in funding your startup if he finds your idea or its investor pitch dull and boring.
An effective Elevator Pitch forms the most promising and significant role in presenting your idea in front of the investors. Elevator pitch is an effective way of describing your idea, concept and the goal of your startup briefly. If you can explain what you envision in a shorter period or on paper briefly in a way that any listener or reader can understand it quickly, you win your investors!
What should an Elevator Pitch contain?
Address the problem you intend to solve.
Every challenge has a solution. What matters is the effectiveness of your solution.
For example, if you are planning to start a travel company and need funding for the same, it won't be sufficient if you say you can help people travel hassle-free. Because this is precisely what other hundreds of such travel companies in the market claim. You will have to state how you would do it in your pitch deck and what are your plans to sustain in the market successfully.
Know your target audience.
It is important to know what audience your company will cater to. Will you be serving only to a particular area or only to a specific group? Knowing your audience helps you plan effectively.
Acknowledge the competition.
Your business plan should be made only after a thorough competitor analysis. Do not be unaware of the competition of similar businesses in the market. Acknowledge their presence and highlight how your services would be different and better than others. Your target audience doesn’t just want to know what you offer but also how better is your service than your competitors or the service they are using at present.
Talk about your team.
Your team is the strength of your company. You must highlight the segregation of work if any, and the expertise of your team members. This increases the credibility of the company.
Explain your financial planning.
Present how you plan to deploy money over a few years. In your pitch deck, put forth provisional sales forecast and expense budget. The way you plan your finances must reflect that you have sound knowledge of financial planning.
Describe and put forth your future goals.
Show what your future goals are and your plan to implement strategies for achieving that goal in your elevator pitch. Show monthly goals you plan to achieve. This gives an idea to the investors about how you envision the growth of your company.
Do not exaggerate; be brief.
You don't have to draft a 5-page document or an hour-long speech! Make sure you say exactly what you want the investors and the audience to know using as few words as possible.
A short yet impressive elevator pitch can do wonders! If you can present effectively what the investors are looking for, you win more than half the battle.