Using a business investor is a legitimate way to get money for your business. However, there are more ways to do it than you may imagine.
Partnering with an Business Investor
This is one of many ways to get money for your business. Surprisingly, you have a number of options, including:
- Venture capitalist
- Angel investors
- Equity crowdfunding
If you choose to pursue this option, you have your work cut out for you. First, you have to choose the option that will work best for you. Then, you have to find a potential investor and convince them. Still, it may be worth it considering Interest rates are rising and it’s becoming harder to find loans. These are non-issues when you work with venture capitalist funds.
Angel investors typically invest in early-stage or startup companies for 20 – 25% return on their investment. Basically, they invest less than venture capitalists, but also require less control.
Equity crowdfunding is when potential investors visit a funding portal website and explore different investment opportunities posted on the site. Potential investors are subject limits based on their income and net worth. Also, they must be 18 years old or older.
Venture Capitalists are investors that give money to build startups. Generally, they are looking for investment opportunities that have both high-growth and high-risk potential. These are fast-growth companies with an exit strategy already in place.
Usually, they expect a recovery time of 3-5 years, often they want to own a large piece of the business, or even controlling stake.
To have a chance, you need to have a:
- Strong management team
- Large potential market
- Unique product or service, and strong competitive advantage
A Winning Pitch Deck to Catch the Perfect Business Investor
Of course, the pitch deck won’t seal the deal immediately. Yet, it is the first impression investors get of your business. Typically, it is in the form of a PowerPoint presentation.
What is the Goal of a Pitch Deck?
The final goal is to get your business funded. However, the immediate goal is just to get to the next meeting. You want to create interest that entices investors to consider investing in your business.
What to Include in a Pitch Deck
While you do have some creative leeway, there is general information that should be included in every pitch deck.
This is a quick 4 or 5 bullet summary that includes what the company is. So, tell them what you do, how you do it, and why it needs to be done.
Mission Statement or Vision for the Business
Include a crisp, concise statement telling them what you want to become. Honestly, it is the backbone of the presentation.
This is where you will introduce yourself and the team, including names and pictures. Tell what each person contributes to the company.
The Problem Your Business Solves/ Need it Fills
Of course, every business should solve a problem or fill a need. Now, your job is to show potential investors how your business does that.
What is Your Product?
Obviously, this is where you introduce your product or service. Explain how it’s different from anything else in the market. Consequently, it’s best to have a prototype or at least pictures for this section if you can.
Is There a Market for It?
First, define your market. For example, who will be using the product? Then, explain the dollar market size. Do you already have customers? If so, include them here. Use the logos of well-known customers the audience will recognize. For lesser known customers, include names and testimonials.
Does the business use any proprietary technology. Include diagrams, graphs, and photographs to show progress if it does. Furthermore, be sure you include proprietary rights like patents and copyrights.
How to Handle Competition
Don’t make the mistake of ignoring competition. In contrast, you will need to address the subject with potential investors. Inform them of who you believe your competitors are. Then, tell them how your business is different. Explain what it is that gives your business a competitive advantage.
This section includes any early sales figures along with:
- Website traffic
- App downloads
- Growth metrics
- Praise from the press
- And testimonials
Tell them how the business makes money, including how a customer retains value long-term. Also, you’ll need to explain what your pricing plan looks like.
This is where you talk about marketing platforms and channels. Don’t forget, it’s also important to note the cost to acquire a customer, as well as the estimated lifetime value of a customer.
Here, you’ll include 3- 5 year financial projections as well as complete current financials. In addition, be to include any key assumptions used for the projections.
Now, it’s time to ask for exactly what you want. Tell them precisely what you’re looking for, remembering that it is okay to give a range. Discuss how long you think this funding will last, as well as how you plan to use the funds. Lastly, if you have any existing investors, include that information here as well.
6 Bonus Pitch Deck Tips
- Make the presentation professional, but visually interesting. If it’s boring, you’ll lose them before you get started.
- It also needs to be easy to access. If they have to click through a billion links, they may never see it.
- Do not include a date. Chances are you will use the presentation more than once, and that is just one less thing you have to remember to update.
- Keep it as short as possible while still including all the necessary information.
- Keep acronyms to a minimum. Too many are hard to follow.
Using a Business Investor is Just One Funding Option
Working with a business investor is a totally legitimate business funding option. However, it is not your only option. Find out what other types of funding you may qualify for with a free business finance assessment. What are you waiting for?