(By James Caan)
“I don’t believe you can be a part-time entrepreneur and you’re highly unlikely to receive funding if you say you’re only putting three days a week into this. It has to be all or nothing – a business is like your child and you need to be completely dedicated. What I will always ask entrepreneurs is how much time – and if they’re a start-up, money – they’re putting into the idea. The more commitment you show, the more likely you are to get what you are looking for“.
When it comes to a winning investment pitch, the entrepreneur is the most important person in the room. I am a passionate believer that people make businesses a success, so when looking for investment, keep in mind that you are being evaluated just as much as the 100 page business plan you may have produced.
From start to finish you need to show why an investor should back you, and in my experience there are a number of traits that successful investees should show during the course of their pitch.
Your first few minutes can set the tone for the rest of the pitch so make the right impression. The small details such as your outfit, your handshake and the amount of eye contact you make are actually hugely important. Remember if you don’t seem like you believe in your business proposition, investors certainly won’t. Never appear apologetic for being there; you need to convey total belief and passion.
I don’t believe you can be a part-time entrepreneur and you’re highly unlikely to receive funding if you say you’re only putting three days a week into this. It has to be all or nothing – a business is like your child and you need to be completely dedicated. What I will always ask entrepreneurs is how much time – and if they’re a start-up, money – they’re putting into the idea. The more commitment you show, the more likely you are to get what you are looking for.
Although investment pitches are a serious business, I do like to see an element of creativity. You could be pitching to somebody who has seen several pitches that day alone – earlier this year when I was considering applications for Recruitment Entrepreneur I saw 15 in a week. With that in mind you want to stand out from the pack. Something to consider is giving them a copy of your presentation on a USB stick that has your logo printed on it. Not only does this mean they can look at your slides in further detail, but it ensures you will probably be the business they remember most.
Speaking of your presentation, what you don’t want is several slides filled with graphs, pie charts and jargon. Crucially, never allow yourself to be boxed in by what is on the slides. People buy from people so you need to be engaging, direct and to the point. If within 10 minutes I still don’t have a clue what your business is about, I will then start to wonder whether your customers will. Keep things simple; you can go into the small print further down the line.
This is possibly the most important point and there are a number of things you need to do to demonstrate your credibility.
Your actual business idea is what you will be judged on, but before you’ve even got into the nuts and bolts of it, you need to demonstrate how well you know the investor in front of you. These days there is no excuse for not having key information about the people you are pitching to, and if you can demonstrate this near the beginning of the pitch you get a firm tick in the box. I’m not saying you should know the entire balance sheet of the investor’s company, but why not talk to them about a recent deal they may have completed? This shows you prepared thoroughly and weren’t just wrapped up in yourself.
What also gives you credibility is having a team with you – ideally in person but at the very least on paper. This tells me that other people buy into your vision and your business. You cannot underestimate how much of a boost this provides to your chances of getting an investment – you’ve now gone from being a lone ranger to a backable team.
Finally, you will always be grilled on your numbers so you must have a complete handle on these. A pet peeve of any investor is somebody who is trying to play things by ear when it comes to things like turnover projections. Ensure you are realistic as well; investment is based on facts, not fiction, so don’t make big predictions with no solid evidence to back it up.
James Caan (Serial Entrepreneur and Investor) is founder and CEO of London-based private equity firm the Hamilton Bradshaw Group. He joined the panel of heavyweight investors for BBC’s Dragons’ Den in 2007.