How correctly to present the project to the investor?
Looking for an investor is a question that mature business often encounters, and startups – almost always. Of course, not everyone can attract investments. Beginning entrepreneurs find it difficult to convince investors for objective reasons: there is not enough experience with the team or a dubious business model. But sometimes the project goes to the basket because of the poor preparation of its author, who could not reasonably justify and present his idea to investors.
Despite the diversity of industries and business models, the format for presenting information about the project is one for all. Here are some tips that will help when preparing a presentation for a potential investor.
Regardless of whether you plan to speak to the audience or send information by e-mail, the presentation structure should be absolutely clear and answer the main questions about the project. Namely:
- What is the customer’s problem solved by your product and how? What is the technology?
- What is your market and its prospects? Required links to relevant sources – marketing research of specialized agencies, statistical compilations, websites and reports of public companies and government agencies and so on.
- Who are your competitors and what are your competitive advantages?
- What kind of team is the project, what is its experience, past successes?
- What are the key stages of the project and at what stage is it now?
You can not do without a financial block, because investors think in terms of numbers.
The financial unit includes the main calculations for the financial model:
- Forecast cash flow – a cash flow plan for the horizon of 3-5 years,
- Forecast of sales and profit,
- The amount of investment required and the rationale for what they will be spent, their payback and calculation of the return for the investor.
The document you send to the investor should look professional. The presentation, as well as the business plan and any other document relating to the project, is his “face”. Wickedly designed materials produce a repulsive impression. Therefore, take care not only of filling your presentation, but also about its appearance.
Rehearse your performance
If you plan to speak with your presentation in front of the audience, consider in advance how and what you will tell. There is no melancholier lesson than listening to a monotonous reading of information from slides instead of a fascinating, lively narrative. If you do not want to catch up on the longing for investors, which does not exactly add points to your project, do not be too lazy to rehearse your performance. The text on the slides should help you build your speech, but not be the very speech.
Try to arrange the performance in 10-15 minutes, an average of one minute for each slide.
Be prepared for questions and criticism
Analysts of investment funds and business angels scan dozens and hundreds of projects, they can know the bottlenecks of specific industries and ask unexpected questions.
Pay close attention to the analysis of project risks, they will be asked about them.
Do not put too bright forecasts in the financial model, it is better to calculate three possible scenarios: basic, pessimistic and optimistic. This will lead to more confidence in the model and will prove that you are adequately suited to evaluating the project’s prospects.
Sometimes foundations meet with entrepreneurs to gather information about the market for their portfolio projects, to test some hypotheses about a particular market or product, and so on. Think of such meetings as preparation for communication with really interested investors, collect the most popular questions about the project – perhaps they should be included in the presentation.
So, in order to adequately present your project to investors, serious preparation is needed. In addition to working on the project itself – team selection and product development – you need to find and analyze information about the market and competitors, calculate the financial model, think about risk management. And then also collect all this in a laconic and coherent document.
The good news is that not so many quality business plans and presentations get to the table to investors, so they will, at least, pay attention to yours. Good luck!