No matter how good your new business idea is, without the financial assistance of some investors in Richmond, it will never see the light of day. Actually discussing these matters can be a scary process, especially since there is so much that can go wrong. Even the most experienced business person can make a mistake when discussing a new product or service with a potential investor after all! To help you negotiate in a better manner, here are some scenarios to avoid in the future.
1) Failing to Manage Your Time
In general, an investor will be a corporate type with a busy schedule. Whether you’re talking to them for the first time at a Richmond networking event or giving them your pitch at a formal meeting, thinking that you have plenty of time is a crucial error. To avoid these potential entrepreneurial mistakes when talking to investors, it is important to manage your time properly beforehand. Thus, you should practise giving your spiel and focus on these specific limits:
- One minute for your elevator pitch (the short intro you give when being introduced to a potential investor for the first time).
- 15 minutes for the formal investment presentation. This equates to at most 15 PowerPoint slides.
- 15 minutes for a decent question and answer session.
By sticking to these restrictions, you’ll then give the investor everything they need without the risk of turning them off or inconveniencing their already busy schedule.
2) Forgetting the Investor’s Needs
While you may have visions of a better world or a lasting legacy, never ever let these goals get in the way of what the investor wants to hear. When you get down to it, they will only give you the funds you need if they can get a profit in the short to medium term. Failing to address this crucial aspect in your pitch is the perfect recipe for them to simply walk out of the room. Instead, give them some steps as to how they can walk out of this in 4 or 5 years with additional profit.
3) Choosing an Unprofessional Setting
If you’re simply starting off in the business world, chances are that you won’t have an office in which to negotiate with investors just yet. This doesn’t mean meeting at your home or a café is acceptable though! A better idea will be to aim for a professional impression by renting short term meeting room. In this way, you can sit down with a potential investor in a quiet location that has all of the technical infrastructure you require to give your presentation. While you may have to pay more for these business facilities, you’ll have a better chance of securing those funds as a result.
4) Omitting the Q&A Session
Many new entrepreneurs view the pitch as simply being the presentation. This often means they give their spiel and then end the meeting, leaving the investor hanging with potential questions that they still want answered. Even the most concise speech will omit certain factors so it is important to let the investor ask whatever they want to. Organising a post pitch Q&A session will help clarify matters to investors who aren’t as knowledgeable about the field as you are. Since they may be giving you their money, it is important to spend a bit of time clearing matters up beforehand!
5) Making Projections without Planning
During your presentation, it is also important to focus on the clear concise steps rather than vague predictions. Anyone can make projections into the distant future about how their business strategies will turn out. The problem is that these generally don’t come true. Instead, you should lay out a detailed plan of attack about how you are going to reach your final goals and what you are going to do if things don’t turn out as planned. Show the investor that you know your way forward and that you have a backup strategy to protect their funding.
These five scenarios are ones that you should take care to avoid when meeting with potential investors in the future. Instead, plan the meeting properly to find the funds that your Richmond business requires!