Prepare for Success
You never know when or where you’ll have the opportunity to pitch your venture to a prospective investor. “Elevator pitch” isn’t just a pithy, clever way of capturing the feeling that a business owner gets when an opportunity arises unexpectedly—pitches really do take place in elevators, in supermarkets, in taxicabs, and in coffee shops.
If you have a big idea, but limited access to financing, then you need to hone your pitch until it’s razor-sharp and diamond-bright. Clarity and brevity are key, but in order to be brief and clear, you need to have a thorough understanding of your mission, your financial outlook, and your company’s position in the market.
Commit your 90-page business plan to memory, then throw it out! Unless you can express your vision for your business in a matter of seconds, you will never need a binder full of figures. Here are three lessons to help you prepare for the big moment, wherever and whenever it occurs.
Less Is More
Lengthy explanations of technical processes will not impress investors. There is an old joke: a sculptor is asked by one of his admirers how he makes an elephant and the sculptor replies, “I start with a block of marble and chip away everything that doesn’t look like an elephant.”
Think of your proposal as a block of marble, and chip away everything that isn’t absolutely essential. Investors need to believe that your business will attract and retain enough customers to make it profitable. If they can’t grasp your concept instantly, then they might presume that customers won’t understand it either.
Your enthusiasm for your concept is infectious, that’s a given. Now you’ve got to focus on being reasonable and responsible. If you present hockey stick projections that show exponential growth and fantastic financial returns, then investors will inevitably conclude that you’ve got your head in the clouds.
Remember that you are trying to convince these people to trust you with their money. Show them that you have a firm grip on reality by offering several versions of financial projections: best case, moderate, and worst case. Base your models on facts, performance data, industry and competitor analyses, and defensible assumptions.
Don’t Be a Know-It-All
You’re the boss. You know what you know, but you don’t know everything. The smartest leaders and the most successful executives are the ones who surround themselves with brilliant, ambitious colleagues. Investors are not funding you, they are funding your concept. Build a team that can bring that concept to life.