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Pitching to Investors

In the early stages of building a company, the fundraising process is daunting. Everyone wants to give their advice, and entrepreneurs may be confused about whose advice to take or leave. In this course, entrepreneur Jana Trantow gives you the tools to start a successful fundraising process.

The biggest challenge for entrepreneurs can be connecting with investors to present ideas. Trantow says it’s best to search for an investor by tapping into your networks, since investors are more likely to connect with a founder that is introduced by a common contact.

Trantow suggests a strategic plan for you to connect with the investors you need by doing research. Start with a large list of investors who have invested in other companies in your industry that don’t directly compete with your product or service. Other entrepreneurs are also good sources of information and potential connections between you and investors.

You can also meet potential investors by going to industry events or conferences. This surrounds you with like minds that are tackling similar problems. 

In preparing for an investor meeting you will need to be decisive. If you know how much you’re raising and why, you can be as prepared as possible. Things will change, but knowing the past, present and future of your company will keep you in control.

There are three major factors to a pitch—vision, milestones and execution. Articulate your vision clearly and know the milestones that will enable you to execute your vision. Then, show the investor you’ve executed previous milestones that were aligned with their vision and continue to do so.

As an entrepreneur, competition is a good sign because it means that there is a market for what you’re developing.  Understand your competition thoroughly to communicate your competitive advantage.

Often, pitches can become meetings. So what topics should your pitch and deck cover? Be prepared to talk about your company’s purpose and the problem you’re solving for consumers. How does your product or process solve that problem, and why is it relevant to consumers now? Bring a prototype or demo of your product or service if possible. What is the market size for your business? Explain your business model, how much you want to raise, and why you need that amount.

A good pitch becomes a conversation—it doesn’t always go as planned and it’s a two-way communication. Be prepared to make live edits to your pitch and answer questions from potential investors. Ask the investors questions about how they invest, what other resources they can bring to the table, and what their process for investment is.

If the investor isn’t interested in your business model, respond to the rejection promptly and authentically. Thank them for their time, and ask if you can follow up with them as the company progresses.

If the investor is interested, discuss the terms of the deal and work with them to find out what is reasonable on both sides for company valuation.

When you think about pitching to investors, do your research on the investors you want to target and your competition to pitch your business model in the most effective way possible.

Copyright 2020 American Chemical Society (All Rights Reserved)

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