As part of our Conversations to Innovate series for July, we also hosted the much-anticipated Investor Readiness: Beyond the Pitch Deck webinar this week, a one-of-a-kind tailored workshop presented by international Start-Up and Investment Specialist, Serena Davis and moderated by VC and start-up expert, Biola Alabi. The webinar provided unique insights into the investor journey and how SMMEs can best prepare to navigate the process from pitching to signing on the dotted line.
Here are 10 key takeaways from the session:
- Say what you mean and mean what you say. Ordinarily, people find it difficult to ask for what they want. Engaging with an investor is not a scenario in which you want to be vague, long-winded, or shy. In your pitch-deck, make sure you clearly answer:
- What is the amount needed?
- How far will the investment take you, what will it be used for and what will the outcome be?
- Show successful proof of concept. If you are preparing to enter the VC arena, an investor will want to see that your business or product is actually tried and tested to a degree. If you want to be successful in your search for investment, as the business owner, you MUST be able to validate with evidence that your concept is able to deliver on its promise.
- Answer the questions the investor is likely thinking about in the back of their minds:
- Investor: How long will it take me to see a return on my investment?
- Your answer: It will take me X time for you to see X return on the investment.
- Can you as a leader get your team from step A to B to C? Do you have the mindset and wherewithal to drive your company’s growth over time?
- The VC journey is like a marriage. When embarking on the search for investment for your business or product, approach it like a marriage, you need to know that you’ll be in it for the long run. Typically, the VC process can span a period of up to 10 years.
- Communication is vital. Both prior to signing on the dotted line and thereafter, what ensures a mutually enriching and cooperative experience is the strength of the relationship between entrepreneur and investor. Many things, good or bad can happen during the investor process. Having a relationship where there is trust makes the tough conversations easier. Always remember this expression: “If you drown and you don’t tell me it’s your fault. If you drown and you do tell me, then it’s my fault.”
- Your pitch deck is a first impression with a potential investor. Often in a first meeting, we want to show all the best aspects. The key to a good pitch deck is to keep it succinct, to the point and simple. Aim for 10 – 12 slides and make use of the style and tone of your language and look and feel, to make it attractive.
- Know your facts. It’s not enough to simply fill your pitch with statistics if you do not understand them. You must be able to substantiate the facts you are using, know and validate their sources. Remember that a serious investor will definitely conduct their own due diligence to ensure the viability of your concept/business before parting with their cash. Note: one must be strategic about when you share what about your concept and business IP (never share your choc-chip cookie recipe).
- Know your market. Knowledge about the size of your market tells answers the question about just how big your industry pool is and whether there is sufficient space, enough demand and supply for a new player. Furthermore, know your competitors understand why it is they are successful be able to answer why your offering is better.
- ROI first and foremost! Among the many other factors that influence an investors decision making, at the forefront is their Return on Investment. The next question is what kind of ROI target should you be aiming for? Typically, a 10x return on investment is satisfactory.
- After ROI, it is a growth mindset that will leave a lasting impression. At the end of the day investors are people. Some are people in business, others may have been entrepreneurs themselves once – either way they are likely to be knowledgeable about which concepts, businesses and markets have potential for growth. Make sure you can clearly communicate what your approach to your business is and how you are thinking about its growth.