Getting investments is a vital step in launching any startup. Securing a meeting with an investor can be hard enough, so you don’t want to let the opportunity go to waste. Here are three simple things you can do in order to get the most out of your investor meetings and increase your chances of actually securing an investment from them.
1. Do your research
In an investor meeting you need to know what you’re talking about. Having evidence and data to backup your ideas will only strengthen your overall pitch. Do research on your market and its current trends. Figure out who your competitors are and make sure you have a clear understanding of how your business will break out from the rest of the market.
It’s also important to do research on the specific investor that you’re meeting with. Understanding a venture firm’s background and interests can help you to tailor your pitch to better grasp their attention. There are several resources available to help with investor research, such as the National Venture Capital Association. For Grasshopper clients, Grasshopper Connect can also offer detailed profiles for each of our investors which provides insights into each investor’s firm, firm type, industries they operate in, typical funding ranges and more.
2. Perfect your pitch
Investor meetings are all about being able to sell yourself. Your business pitch should be direct, simple, and covers all the necessary details that investors need to know. Your pitch should effectively answer all the following questions:
- What problem does your business solve? If your product or service doesn’t solve a problem, investors won’t see it as worthy of their capital. Define the problem in a way that your audience will easily understand and use this problem to drive the rest of your pitch.
- How will you solve that problem? Your startup’s purpose is to solve the problem that you’ve defined. Explain how exactly your company will do so. It may be helpful to create graphics that can show how your company solves the problem.
- How does your product/service work? Investors want proof that your solution actually works. Having data to back up the functions of your product or service can help with getting investors to believe in your solution.
- Who’s your target market? Describing your target audience can help investors assess the overall impact your product or service might have. Are you catering to a general audience, or a more niche segment? Make sure you have a good understanding of who exactly you’re marketing to.
- What’s the current condition of your market? Show off the market research that you’ve done. Good ideas can falter in poor market conditions.
- How are you positioning yourself in that market? You should have an idea for how you’re going to differentiate yourself within your market. Make clear how your offering is unique and will stand out against your competitors.
- Is your business viable? Investors want to know whether or not your startup is profitable. Show your potential investors how you’ll use an infusion of new business funding to grow and scale your operations in order to reassure them that you’re a reliable investment.
3. Be prepared to ask questions
Investors will ask a lot of questions about you. Something new entrepreneurs often forget is that it’s good to ask questions back. If an investor flips the script and asks if you have any questions for them, you should already have some prepared. Some examples of good questions to ask include:
- What made you interested in taking this meeting? It’s good to know what your business is doing right and what investors like about your pitch.
- What aspects of the business give you pause? Asking this question can give you insight into what you may need to overcome in order to receive their investment.
- What is your investment process like? This question can be a great way to understand the investor’s process and what the next steps may be.
- Can you tell me about a recent investment that was successful and why? An investor’s response to this question can give insight into the kind of role that the investor plays in their investment.
Remember that an investment is a relationship – you are equally deciding if the investor is someone you want to work with for the coming years.
By Michaela Lenahan in Startups
