How To Find Investors For an Invention
“In the course of the year I spent trying to raise money [for Il Giornale], I spoke to 242 people, and 217 of them said no,” writes Howard Schultz, CEO of Starbucks coffee. “Try to imagine how disheartening it can be to hear that many times why your idea is not worth investing in. … It was a very humbling time.”
Before Schultz became CEO of one of the most well-known brands in the world, he wanted to open Il Giornale, a coffee shop concept inspired by his time in Milan. In order to see the concept through, he had to raise $1.6 million. As stated above, it was not an easy feat.
He poured his heart and soul into this brand before deciding to buy Starbucks for the modest price of $3.8 million. Schultz is now worth $3 billion, and Starbucks brings in an estimated $16 billion per year.
You may hold in the depths of your mind, or in the palm of your hand, the world’s next sixteen billion dollar idea. But if you do not know how to adequately pitch the idea to investors, the idea may never reach it’s maximum potential.
This article present tips recommended by top influencers to get an investors attention, and keep it.
If you want to know how to produce and present a foolproof pitch to investors, ensuring your invention gets the return it deserves, keep on reading.
Bring the Panache
Your presentation should be seamless, from start to finish.
Dress to Impress
You might think the sheer genius of your invention will speak for itself – so much so that you might be able to skimp on the pizazz of the presentation. You might think your appearance doesn’t matter, and that the investor will only be focused on your business plan.
On the contrary – be sure to look, sound and feel your absolute best.
Influencer Neil Patel writes for Entrepreneur.com that “the thousand bucks you spend on a new suit will pay for itself a thousand times over when you secure the funding you need. So, don’t skimp.”
Find Ways to Appeal Beyond Dollars and Cents
It is, of course, more than just about what you are wearing. In addition to dressing sharply, Patel also recommends that turning your pitch into a story is a surefire way to secure the attention of your investor.
“Investors are bored with spreadsheets, valuations and numbers. If they want that information, they can get it. What you can offer that no term sheet can convey is the story and pathos behind your startup. Everyone loves a good story, even the most data-driven investor.”
Patel recommends that when it comes to enthusiasm for your product, you simply cannot overdo it.
“Wild enthusiasm will not obscure your sophistication, insight, integrity and realism. It will only enhance it,” he says.
Entrepreneur.com contributor David Worrell says to “get emotional.”
He draws from the knowledge of Michael Makropoulos, president and founder of High Impact Funding LLC, who says of a pitch: “If it reads like a novel, you compel [the investor] to move through the parts of the plan you need them to read.”
Makropoulos suggests that an emotional appeal to an investor exponentially increases your chances of drawing them in to your presentation.
Perfect Your Brand
The story of your invention goes hand in hand with your brand. Ensuring that your brand strategy is both concise and attractive will play an important role in the seamlessness of your presentation.
When You Think You’ve Been Specific Enough, Be Even More Specific
Whether your are pitching your invention to your wealthy grandfather or the sharks on Shark Tank, all investors have one important thing in common: they want to know how you will make them money.
“Investors’ time is their most valuable asset,” says Neil Patel. “If you convey a respect for their time, they will interpret that respect as your ability to treat their funding with respect.”
Patel recommends that a presentation not exceed 10 minutes in length. If this sounds impossible, you may want to consider refining your business model.
Patel outlines the following tips to keep your presentation as specific as possible:
- Explain exactly what your product or service is
- Explain exactly what makes it unique
- Explain exactly who your target audience is
- Explain exactly how you intend to acquire these customers
- Explain your revenue model
“A solid plan needs a complete financial model and clear assumptions: how much money is needed, where investments will be made and where the money will get you,” says David Worrell.
There is no such thing as oversimplifying. Investors want to know, again, exactly why their money is needed, where it will go, and how they will get it back.
Practice, Practice, Practice
It should go without saying that you should write down a script of what you plan to present, read it aloud in front of a mirror, read it aloud in front of your cat, and then read it aloud in front of a mock audience.
While you should avoid sounding robotic, it is important to remember that any indication that you are unsure or scrambling for words will significantly detract from your message.
Write it down, re-write it, and rehearse it. Before long, you’ve nailed it.
Once you have nailed down your presentation, begin to anticipate the kind of questions an investor will ask. If an investor is truly interested in your product, he or she will most likely have several follow up questions. Investors will want to know that you have foresight. Avoid being caught off guard by a question, and welcome with open arms the question and answer portion of the meeting.
Wrapping It Up
“You must believe in yourself and your product before anyone else will.”
According to the “sharks” of ABC’s business reality show “Shark Tank”, this is the golden rule for entrepreneurs.
You must advocate for your idea with all the spunk and tenacity of a Howard Schultz. You must be confident that your idea can make an investor money.
The last piece of advice offered by many investors is simple: Don’t be afraid to ask for help. A pitch to an investor is not something you can over-prepare for.
If you have been waiting for the right time to bring your invention or business idea to life, why not start today? Find useful tips to draw your idea out of your head and onto the market here.
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