8 Vital Steps to Attract Investors for Your Small Business

For small businesses to grow, additional sources of financing are crucial. As a result, it’s common for companies to seek outside investors to extend their monetary assets. In most cases, investors are looking to invest their money in promising business enterprises, hoping to earn a sizable profit at some point down the line. Even though they have money to spend, convincing them to support you over hundreds of other companies is not easy. However, it is not impossible.

In this article, I will share practical steps on attracting investors to your start-up business with you.

Prepare Your Pitch

The first step to pitching your business proposal to potential investors is to capture their attention. A brief presentation or an “Elevator pitch” is an excellent way to do it. In an elevator pitch, you use a short, persuasive speech to catch attention to what your organization does. It is also possible to use them to create interest in yourself, a project, or an idea. An elevator pitch should last for a few seconds. Elevator pitches usually are as long as elevator rides, thus their name. Ideally, they should be entertaining, memorable, and concise. It is also necessary to explain why you or your organization, product, or idea are unique. A standard method of doing this involves ignoring details and focusing on a single idea. After that, you can set up a meeting to discuss the matter further.

How to Prepare for an Elevator Pitch

1. Determine Your Goals

  • Think about what you hope to achieve with your pitch.
  • Aiming to introduce your company to potential clients?
  • Have you come up with an excellent idea for a new product that you would like to pitch to an investor?
  • Your goal is to make it clear what your goal is, what your business does and what you can bring to the customers in an engaging and straightforward way.

2. Describe Your Role

  • Start with explaining who you are. You should focus on how you help others and how you solve their problems. You can include statistics or information that explains the value of what you do.
  • How would you like to be remembered by your audience?
  • The first thing to remember is that your pitch must be interesting and gives you a sense of excitement. You will not excite your audience if you aren’t passionate about it.
  • Your audience might not remember each word you say. But, investors will remember the enthusiasm in your delivery.

3. Explain What Makes Your Startup Different

  • You should also mention a Unique Selling Proposition in your elevator pitch.
  • Make it clear how you, your organization, or your idea is different. Your USP should come after you describe what you do.

4. Ask Questions

  • Engage your audience. Prepare open-ended questions that will encourage them to take part in the conversation.
  • Please make sure your answers to their questions are clear.

5. Wrap It Up

  • You should put your entire pitch together once you have finished each section.
  • After reading it aloud, time yourself using a stopwatch. Ideally, it shouldn’t last more than 30 seconds. Otherwise, you will lose the prospect’s interest or monopolize the conversation.
  • After that, try to remove unnecessary things. The shorter your pitch, the better. You need to be able to seize your audience’s attention.

6. Practice

  • To get better at something, you need to practice. Always remember that how you say something is every bit as significant as what you say. You’re likely to sound unnatural, speaking too fast, or forget essential components of your pitch if you don’t practice.
  • Practice your pitch as often as you can. Practicing more will make you more natural at pitching. It should sound as if you are having a relaxed conversation, not a pushy sales pitch.
  • Your body language communicates like your words to your listener as you talk. So be aware of your body language while you speak. Try practicing with a mirror or with colleagues. Practice until you feel comfortable delivering the pitch.
  • The idea is not to sound scripted or like you have it prepared, even though you do. Changing it is fine once you get used to delivering your pitch. Just don’t sound too robotic or overly prepared when you change your pitch.

Present a Market Research Report

You must present your company’s potential market to show that it is worthwhile to invest in. To establish your expertise in this field, you should be able to tell the following.

  • Who are your key competitors
  • What are the service standards
  • What is the industry size
  • What you can offer to portray yourself as an authority

Describe Your Business Plan in Outline Form

  • As soon as you identify the market, you need to outline how you plan to enter and compete in the market. Then, show what you plan to do when you enter it.
  • It’s important to realize that this plan isn’t set in stone but concrete enough to have a sense of the company’s direction.
  • An annual plan is an excellent place to start. Start with details for the first year and become broader as time goes on.

Prepare a Return on Investment(ROI) Pitch

  • It doesn’t matter how much investors believe in your business; they need to make money to justify their investment.
  • You should emphasize what they will gain by investing in your company.
  • A good pitch must show how you will get them a return, regardless of pitching an angel investor or venture capitalist.
  • While it may seem easier to focus on yourself and your business model, investors want to know how they benefit. So, if you’re going to get their attention, clearly prove when and how they will earn their ROI.

Look for Co-Founders

  • You don’t merely sell your product or service. Instead, you sell your whole team to investors. As a result, a co-founder is more likely to attract investors and venture capitalists than a single proprietor.
  • In light of this, be wary of taking on anyone as a co-founder. It is crucial to pick the right leadership team for your startup. However, having the wrong co-founders can be more hurtful to your business than having no co-founders at all.
  • Finding the right co-founder can make the process of getting your business started considerably more manageable, even without attracting investors.
  • A company can be challenging to start on your own. However, the ability to rely on partners can give your business a huge advantage.

Show Investors Your Results

  • It’s difficult to break the money-and-customer cycle. You need money to get customers and customers to earn money.
  • It’s a difficult situation, but before approaching an investor, you should attempt to gain customers or users rather than focusing on raising money first and then acquiring customers. Make a strategy to get your first customer that doesn’t require massive outside investments.
  • How important is this?
  • If you have some traction before applying for investment, it will be much easier to get investors.
  • A real paying customer is the best proof that your idea will work for investors.

Make Sure You Research Your Investors

  • Before you approach investors for your business, make sure you do your research first.
  • Do they have experience investing in similar products or companies to yours? What is their philosophy? Does it match yours?
  • A partner whose interest closely matches your own is more likely to invest.
  • It is vital to know your investors personally and professionally before meeting with them. However, this can be challenging because most of their information will not be public.
  • Seek out connections internally and ask around. Read their bio, visit their website, or read their biography.
  • You will inevitably learn something about your investors. Researching them will provide you with valuable information you can use to attract them to your business.
  • Your passion and enthusiasm as a business owner will shine through if you take the time to learn about them before the meeting. This will allow them to see how serious you are about your business idea.

Provide your investors with a choice of participating in your business

  • Investors who fund your company might want to participate in it as well. You have to consider that possibility whenever you seek their investment.
  • Angel investors can provide mentorship, advice, and support as you work on strengthening your business’ foundation. In addition, you can offer them the opportunity to join or to just stand in the background if they want to.
  • Your business will also benefit from finding a willing investor who will take part in it. If you can secure angel investors to invest in your company, their experience will contribute to its growth and success.

For some startup owners, they have a good enough credit history to get a business loan from a lender cash mart like a licensed money lender in Tampines. But if you do not have this advantage, getting an investor is one option you can always consider.


The post 8 Vital Steps to Attract Investors for Your Small Business appeared first on Crazy About Startups.

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