What Investors Listen For When Hearing Your Pitches?Katy Cook
In case you are wondering why it is so difficult for Startups to secure funding from investors, first you need to know “what business, investors are in and why?” The answer to both is: they are in the business to make money and for some, “Doing Good” too. They strive to achieve that by managing risks to increase their ROI. They are hoping for 10X or 20X and sometimes, dream about unicorns too. They can determine within a few seconds if they are wasting their time. Remember, time is a precious asset.
Here are a few things all Entrepreneurs should be prepared for:
* Your first impression should be memorable and leave a lasting impression. From the get-go, make potential investors think “how come I didn’t think about that?” Behind every great business is a great story. Tell your story passionately.
* In-depth knowledge of the domain/sector/industry, market trend, and your Business Model.
* Need Impressive forward-looking growth projections based on sound assumptions.
* Mastery of the major numbers (revenue, number of employees, cash burn rate, cash runway, MRR, ARR, LTV, and CAC to name a few!). Cashflow is like oxygen for business survival.
* Ability to communicate the product benefits in an extremely clear and concise manner. Your solution should be the simplest anyone can offer. Don’t fall in love with your solution. Instead, be obsessed with the problem.
* Impressive understanding of buyer psychology and their buying decision-making process.
* Conversational voice and tone.
* Demonstrated resourcefulness (you are spending their money!)
* Appropriate understanding of what a healthy company/investor relationship looks like (you two need to get along for
at least the next 3-5 years!) Most marriages don’t last that long!
* The CEO takes responsibility for all aspects of the company’s performance.
* Having an encyclopedic knowledge of every competitor and potential “disruptors.” Need to demonstrate a sustainable competitive edge. Without that, we have no business being in that business.
* How will you deliver the “Team” slide? They value your Team more than your Business Idea! They want to ensure you and the team are trustworthy, coachable and possess key soft skills to scale up, execute, and
Shan Shanbhag, Ph.D.
Mentor and Business Development Advisory
Principal, Shanbhag Enterprises