Raising The Stakes | Entrepreneur Features | MoneyMaker Magazine

Ten tips to avoid pitfalls when pitching your business to raise finance

Entrepreneurs seeking to?raise finance from venture?capital houses often find?it notoriously difficult to?get seen, let alone invested?in. The stark truth about?the nature of the European?start-up market is that there?are many more talented?entrepreneurs seeking finance than there?are venture capitalists with funds to?invest.

Nonetheless, as an ambitious?entrepreneur looking to accelerate?his or her business, finding a suitable?venture capital house to partner with?can be game-changing. But how do you?go about choosing which of the many?venture capital houses to approach??Where are you likely to have the most?success? And what are venture capitalists?looking for? We asked Alliott Cole?from the ventures team at Octopus?Investments for his ten top tips on how?to ensure you give yourself the best?chance of success.

A perfect match

Stop, and really consider whether?seeking a venture capital house as?a partner is the right option for your?business. Are there sources of capital that?are a better fit for your business at this?stage in its development or the sector it?is in? Venture capital is appropriate to?only a very small fraction of businesses.

Depending on the stage of the business,?venture capital houses may look for five or?ten times the return on their investment,?and often more. Can your business really?grow this quickly and to this extent? Don?t?fall into the trap of trying to?optimise?your business for a certain subset of?investors.

Respect the investor

Research the community of investors. Understand from their news feeds, blogs and websites the stage and sector of businesses each ?investor wishes from a partner. Take a focused, tailored approach to investment. Putting time in up front to research the market will minimize the risk of wasted time and frustration later on, and won?t annoy investors who will quickly detect when an entrepreneur hasn?t put the ground work in.

Network

There are a wide range of online forums and social communities where entrepreneurs and investors share thoughts and learn from each other. Start engaging with these communities, ask questions and discover best practice from those who have been there and done it. Don?t be nervous about this ? there are many treading in the same shoes as you, carrying the same hopes and aspirations. Join the movement.

Warm introductions do help

Approaching investors is an art not a science, so think tactically. Seek out those who have done business with your short list of investors, perhaps an entrepreneur that they have already backed, or an adviser they may trust or work cloesly with. Again, doing your research on these people will pay off. The press releases or portfolio pages on their website is a good place to start to discover this intelligence.

Present in a simple and straightforward way

If you do manage to set up a meeting, always assume that your audience will have no knowledge of your business. Start with the key facts, use simple language and avoid technical wording. You need to inspire and inform. Ten slides are all it should take. Aim for a 20 minute presentation and keep it high-level.

Let your audience determine which areas they?wish?to focus on and explore further. Never freestyle, and don?t use video to explain your concept. If you are unable to explain your?business?proposition verbally, you run the risk of losing your audience. Get the presentation right.

Eliminate mistakes

Your investor wants you to shine,?but silly mistakes will turn them?off even the best idea. Nothing is more?frustrating than when things go wrong?and an entrepreneur makes unnecessary?basic errors ? it makes the entrepreneur?look incompetent and undeserving of?investment.

Give yourself the best chance?of success in your presentation by doing?the preparation, getting to the meeting an?hour early and get into the meeting room?immediately to set up your presentation.?Bring hard copies of your presentation as?back up and, as obvious as it may seem,?never forget to bring a laptop charger.

Present to the slide deck

Always, always, present to the?slides, whether in hard copy or on a screen.?Structure is critical. Investors will always ask?you questions and lead you down different?paths, but the presentation is your friend?and your means to keep on track and cover off all the main points.

Sell your vision and show enthusiasm

Show your passion and enthusiasm.?Bring energy into the room and?demonstrate that you have the conviction?and resilience to make your business grow?explosively. You not only need to prove to?a venture capitalist that they can trust you?to grow their investment, but you also need?to show that you could work well as a team?together.

Clear milestones and key performance indicators

The flip side to the previous point is that?this enthusiasm must not cross the line?from visionary to fantasy. Show that you?understand your industry, logically explain?why your business will succeed, and clearly?indicate what will drive value and what?the limitations on growth will be.

We like?management teams who work on data-led?decisions, so know your financials inside?out and back to front. No investor will ever?criticise?you for knowing your numbers too?well, so use them to convincingly illustrate?how you to intend to rapidly grow your?business.

Ask for, and then listen to, feedback

Feedback is invaluable, and?will help you along your path, regardless?of if you secure investment from a pitch.?Are you receiving consistent messages from?those you have approached?

Be careful not?to ignore feedback ? investors are generally?consistent beings in that they want as close?to a guaranteed ROI as possible, so if one?says one thing then there is a very good?chance the next will say the same.

?

Alliot Cole is a member of Octopus Investments,?who offer innovative investment solutions to?UK investors, and a wide range of funding?options for exceptional companies.

www.octopusinvestments.com

Source: http://www.moneymakermagazine.co.uk/raising-the-stakes/

free pancakes at ihop martina navratilova high school shooting daytona 500 national pancake day ohio school shooting sean young arrested