Well, how many times does this question come up? Unfortunately in my experience, too many entrepreneurs don’t prepare properly. I understand that it is tempting to jump in, but that can come at a high price.
This is what I think you need to do before you pitch:
1. Have a workable business plan.
It doesn’t need to be flashy but your plan should include some market research, your sales and marketing strategies, clear milestones and performance objectives, P&L, cash flow and balance sheet for about three years out, past financial records if you have them, and your executive summary.
2. Clearly defined investment proposal
This most probably will be part of your plan. It includes the investment you require, the return on investment for the investor (MOST important), business valuation, what you need the money for, your offer, board positions on offer, details about shareholders and exit strategies.
3. A capable and cohesive management team
Is your team 100% committed to the company? Will they see it through the tough times? Are there any gaps in your team that need to be addressed?
4. A 15 minute pitch
Have you put together a pitch for that very important meeting with investors? Your plan is the basis for this pitch. If that is a well thought out plan then the pitch is relatively easy.
5. An understanding of your potential investors
Do your research on the investors. Understand what they want to achieve. Look at other companies they have invested in. Talk to CEOs from these investee companies. Talk to others in the investment community to get an understanding of what prospective investors would be like as partners.
6. Full Disclosure on All Issues
Anything that may cause concern now or in the future needs to be disclosed to your future investors early in the discussions. This is a bit tricky and if you have concerns then get advice from an experienced entrepreneur. As well, there may be issues relating to other shareholders or directors that need to be disclosed.
7. Intellectual Property Protection
Make sure that you have done everything you need to do to protect your intellectual property. Cross check everything. Miss anything, and you could have serious problems.
If you can give yourself an eight out of 10 on these seven points, then you are in pretty good shape. If you feel that you need to do more work then it is best to get it done before you see investors. You will be way out in front if you make a great first impression.
Your efforts will be rewarded.
Gail Geronimos, is the founder of Achaeus, which helps entrepreneurs develop their businesses and she has just started a new site www.pitchingtoinvestors.com with tools and tips about how to develop killer presentations to raise capital.
To read more Gail Geronimos blogs, click here.
James was the editor and publisher of SmartCompany and LeadingCompany for five years. He is now the Australian Financial Review‘s companies & markets editor, and a former BRW editor.
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