Start-up companies will enter an industry with a fresh outlook, which can help them to develop an innovative USP. Unfortunately, their inexperience could potentially prevent investors from writing them a check. It is, therefore, important to prove you have what it takes to create a successful business. Read the five ways to sell your start-up company to investors.
- Establish a Relationship Before You Make a Pitch
Develop an organic relationship with a prospective investor before you make a pitch for capital. Research who they are and what they do, as they may have preferences on industries, business stages and risk thresholds. Learning more about an investor before you ask for investment will also help you identify their passions and experience within the industry.
Try to develop a rapport with them when first starting out, so they can watch your business progress over time. As a result, they’ll have more confidence in your brand, and you’ll appear less desperate for their investment, so you will have more power when the time comes to negotiate terms.
- Professionally Market Your Business
Investors do not want to invest in your passion; they want to invest in a strong brand that can provide an exceptional return on their investment. Marketing matters when it comes to pitching your company for capital. You must be able to professionally explain who you are, who your audience is, and how you plan to grow the business. For this reason, you should consider creating a high-quality video that will sum up everything about your brand and the benefits of investing in your new business, which will prove you’re not an average start-up. Contact Working Beautifully to create high-quality videos that will grab an investor’s attention.
- Know Your Numbers
It doesn’t matter how solid your USP is, an investor will not provide capital if you do not know your numbers. They want to be confident you understand your company’s finances and have a clear business model; otherwise, they will be taking a huge risk in your company. Not only must you know your numbers, but you must be able to articulate how your business will make money in a select timeframe, and their potential return on investment.
- Prove You are Personally Invested in the Company
You cannot expect investors to invest their money into the company if you are not willing to invest your time. They will want to be confident that you are fully-committed to steering the business to success, which means you might need to give up a part-time job that could be taking you away from the start-up.
- Prepare for Tough Feedback
As a start-up company, it might be challenging to fill in every gap or answer every question during a pitch. However, you can guarantee an experienced investor will spot any potential issues immediately, and they won’t hesitate to test your knowledge and identify how you handle tough situations. Ensure you’re not left flustered by anticipating tough questions, so you will have the perfect response to instill confidence in your knowledge and brand.