As the startup founder, your focus will be on many aspects of your business. However, the one aspect that you should always concentrate on is the financial aspect. Keeping your finances strong will help you succeed in your venture, meet all obligations, invest in the development of your business, and keep the lights on. The earlier article looked at seed funding and how to get it.
This article will take you through the essentials for making a compelling pitch. We will prepare you on what to expect, what to project, how to answer questions, and the points to include in your presentation.
Preparation work to pitch for seed funding
Start with the concept
We understand you are familiar with the product or service and seeking seed funding. However, the concept may be unfamiliar to others, and you need to build a cohesive story about your product or service. You must make a case for the need that the product or service will meet. People need to understand the reason behind the idea you are selling.
Understand your audience
When you get an appointment to pitch for seed funding, research the people you will present to. This way, you know what to say and how to present your case. For instance, if you present to a maverick entrepreneur, you are better off appealing to their adventurous side. When presenting to finance folks, prepare the numbers and make the presentation more commercial.
Prepare, rehearse, and refine
Most of the time, all you have are the first few minutes of your interaction, and if you cannot grab your audience’s attention, then your chances of getting funding are low. So prepare yourself well, keep rehearsing, and get feedback from your critics to refine your presentation. You will be surprised to see how many people fail to grasp your concept or how it is marketable.
Step away and be objective
Coming up with a concept for a business will connect you emotionally to the idea, and it will be difficult for you to be objective. Have a friend or family member pitch the idea to you and you will realize that the concept sounds different when you look at it objectively. It is essential for you to be objective so that your pitch for funds is successful.
The actual pitch to get seed funding
Now that we have looked at some preparation aspects, let’s dive into your presentation.
Start with the problem statement
Think of this part as your pre-elevator pitch, giving you about 30-60 seconds to get your point across. When you do this, concentrate on the emotional aspect of the problem your product or service will solve. Then develop a crisp problem statement that will appeal to the listener and leave them wanting more.
Lead with an elevator pitch
Now we have our problem statement ready, we come up with an actual elevator pitch. That is presenting your concept, the target audience, and the commercials in a few minutes. Let’s look at an example. You have a product that has proven excellent at curing baldness. Your pitch should be “How many times have you looked at someone’s balding hairline and wondered why there’s no solution? Our product will help you with that and reverse balding, slow down hair fall, and reverse grays! My 83-year-old grandpa and his friends have proven this product works.”
Market the market opportunities
Have numbers ready on the market potential for this product along with some statistics around similar products. You can talk about quality, pricing, and their positioning in the market.
Talk about the practical side of your concept
Many products sound promising in theory but may not have practical applications. For instance, pitching an automatic lawn mower for residents in a crowded urban area with flat dwellers may not work. But if you want to sell the same product to an office building with lush lawns, there’s a chance for success.
Explain the technicalities involved
There are bound to be technical aspects involved in your concept. Make sure you explain these in simple and easy-to-understand words. Doing this will ensure your concept is not viewed as a me-too product.
Include cost, business model, and possible profits
If someone is considering investing in your business, they will want to know what the costs are going to be, the business model you are proposing, and the profits you are anticipating. This will showcase the product’s viability and your commitment to making it a success.
Introduce your team and possible customers
To fund your business, the investors will want to be assured of your business continuity and having a team of involved people will help. Introducing your team will show how well-invested you are in the concept and how committed to making it work.
Have a detailed marketing strategy
Gone are the days when people believed that a good product sells itself. You need a solid marketing plan to ensure your product reaches its target audience. Put together a marketing plan to showcase to your potential investors so they know the next steps you will take to launch the product.
Emphasize the exit steps if required
Seed funding is the first step in launching your startup and many investors may not want to support you beyond this stage. Have exit options for your investors so that they know their choices. It can include equity stakes, consultancy, profit-sharing, etc.
Close with an appeal
Once your pitch is over, leave the audience with an appeal for them to take the next step. In many instances, investors evaluate your product on its merit but also want to see the spirit of entrepreneurship in you. Be open and honest while making your appeal for funds.
Asking for investment for seed funding can seem daunting but with the above steps, you will be well-prepared to make a solid case.
