If you have a startup idea, you don’t need to be a superstar presenter to capture the attention of investors. In this article, serial entrepreneur Jason Kulpa explains three tactics to close a deal with an investor. Using these confidence hacks and rapport-building guidance, you can increase the odds of getting investors interested in your venture.
Show that you’re all in.
When you make a pitch, either in person or with a business plan, one key aspect a potential investor will always look for is how much skin you have in the game. In addition, an investor wants to know that you have put all you can toward the success of your venture.
Even the best opportunity will represent at least some risk for an investment firm or angel investor. Therefore, they will look for indications that you have as much to lose if the venture fails as they will have. In short, they want to know that you are all in—not testing the waters or casually experimenting with a business idea.
A common mistake new entrepreneurs make is believing that their “sweat equity,” or the amount of time they have invested toward getting the startup to where it is, will signify an adequate commitment to the new business. But, of course, an investor will want more than that. They want to see that you are invested financially in the company’s success and that your level of risk is significant enough to keep you motivated when the going gets tough—and it will.
Know your market opportunity cold.
When seeking an investor, entrepreneurs should focus their business plan on growth and penetration opportunities for the market in which they will operate. Demonstrate in your presentation that you know exactly how big the market is, what influences are active in the market, and what share of the market you can capture.
Use verifiable numbers to support every aspect of your plan. Especially when talking about how much of the market you can capture, be sure to clearly articulate how you will achieve your claims. Even if some aspects of a market seem obvious, support your assertions with numbers. For example, instead of saying, “the home fitness market is large and growing,” use the exact and verifiable numbers of the size and growth of the market. Then lay out your plan for capturing a piece of that pie.
Craft a concise presentation.
Remember that investors do what they do for a living, and they are very good at sniffing out nonsense, exaggerations, and fluff. Therefore, your presentation should be detailed and thorough but concise. For printed presentations, having thousands of words on dozens of pages will not impress an investor. For oral presentation, droning on and on for an extended period will not make you seem more knowledgeable.
Use concise language and rewrite your presentation repeatedly, each time cutting out the fluff and repetitive or needless phrases.
The adage “a picture is worth a thousand words” applies to business plans too. Charts, graphs, and other appropriate images can tell more of your story with fewer words.
Most of what we have discussed here boils down to a few simple principles. Whether making an in-person pitch or submitting your business plan, respect the potential investor’s intelligence, experience, and time.
If they are a successful investor, they know what they are doing. Exaggerating your opportunity or making outlandish claims about your idea will not bode well in the end. If you have a solid plan, they will recognize that and ask for additional information they may need.
Put your best foot forward, all the while without appearing desperate for their help. If you seem desperate, your idea will lose credibility.
About Jason Kulpa
Jason Kulpa is a serial entrepreneur and the Founder and former CEO of UE.co, San Diego’s Fastest Growing Business multi-year award winner, and a Certified Great Place to Work multi-year winner. Mr. Kulpa is a two-time winner of the Most Admired CEO Award of the San Diego Business Journal and also a semi-finalist for the Ernst and Young Entrepreneur award. Under Mr. Kulpa’s leadership, in 2018, his teams volunteered at over 24 events and worked side-by-side to improve the San Diego community. They hosted a gala dinner benefiting individuals with autism, cheered on Special Olympic athletes as they broke their records on the track, and brought school supplies and cold-weather gear to students impacted by homelessness. Jason’s mission is to bring awareness, support, and inclusion for special needs causes.