It is never easy raising money but it just got a whole lot tougher. Are there tried and trusted techniques to turn investors on? Yes there are. The secret sauce ingredients include: rigorous preparation, a great compelling story, delivered with passion by a credible management team.
Let’s break it down into three parts, preparation, content, and delivery.
Preparation
First, gather together answers to questions that will be asked by the business angel, venture capitalist or private equity player. What is the status of your industry in terms of trends and statistics? The key is to sound authoritative. Demonstrate that your team understands this market without being verbose. The value proposition – does it connect with customers? Why now? What makes the management team credible? Which analysts validate your strategy? How will you make money? Be clear on the itch you are scratching! What business am I in? Be clear why you are remarkable. Is it a very competitive space and if so why will you succeed? Little competition – does anyone want to spend money on your solution? Get on top of the detail. Memorize key facts. Be ready to explain the volume and yield drivers behind you historical numbers. Show your mastery of the economics of your business. Build a business plan that summarizes the policies you need to run the business. Ensure all key policies are articulated in a detailed way. A great business plan allows you to produce a great one page executive summary. Finally do your due diligence on potential funders, including studying their web site to discover their portfolio, previous exits, investment criteria, and bio of partners.
Content
What do I cover in my business plan and my executive summary? Write an enjoyable compelling story that covers: how much money you need, how you will spend it, how much your business is worth, why customers love you, how you will make money, why is it scalable, what makes your leadership team credible, what is the competitive landscape, and explain barriers to entry and the risks of what could go wrong. Prepare many what-if scenarios. Use the one page executive summary to get interviews and then use a few power points as props to deliver your story. Talk with confidence knowing your speech is backed up by a rigorous business plan.
Delivery
The executive summary has been sent, hit the bull’s-eye and has resulted in a face to face meeting. How do you handle a face to face meeting? Words of caution! First 60 seconds are unreasonably important. Lead with your strongest, most remarkable statement. Remember eye contact is vital so you don’t want an audience getting lost in the deep and meaningful graphs instead of looking at you. Length of presentation? Maximum 20 minutes with big changes of pace every 5 minutes. Talk slowly. Use a maximum of five power points. Involve key members of your team to make key points. Finish with a very strong 60 seconds bringing together the proposition and clear next steps.