15 Effective Ways To Prepare To Pitch To VC Investors

FORBES > MONEY
Expert Panel®
Forbes Councils Member
Forbes Finance Council Post
Feb 22, 2023,08:15am EST
Raising capital is a critical challenge for entrepreneurs, and in today’s competitive market, securing funding can be more difficult than ever. With Crunchbase reporting that global venture capital funding hit a two-year low in August 2022, entrepreneurs must be prepared to go the extra mile to stand out and secure the investment dollars they need to grow their businesses.
Having a full understanding of what investors are looking for and how to best sell your vision has never been more important. Below, 15 Forbes Finance Council members offer their best advice for improving your odds of landing an investment deal. Follow their practical tips and strategies to help drive investor interest and secure the funding you need.
1. Bootstrap To Start Earning Revenue
If possible, use bootstrapped funds (personal, partners, family and friends) to come up with a minimum viable product (MVP) and start earning some revenue. I think the days of good terms on no revenues are likely behind us or far off in the future. Showing some revenue—especially multiyear agreements, if applicable—will go a long way with today’s fundamentally minded investors. – Justin Sanderson, Sanderson Wealth Management
2. Know Your Business’ Solution And Value
Flashy pitch decks are great, but in a tight funding market, entrepreneurs need to focus on two key components of their business: solution and value. What market need does your business solve, and what value does it bring to the marketplace? Investors are looking for businesses that have a clear value proposition and a strong potential for growth and profitability. – Glenn Hopper, Sandline Global3. Highlight What Makes Your Business Unique
Differentiate yourself with your technology, expertise and/or product. Gone are the days when copycat companies would get funded (for now, at least). Bring something truly unique to the table, and be reasonable about spending assumptions. Investors are wary of unprofitable companies. They would prefer to back companies on a path to self-sufficiency. – Rebecca Mitchem, Neotribe Ventures4. Consider Your Long-Term Vision And Exit Strategy
Carefully consider the longer-term vision of what you’re looking to accomplish with the business and its impact on your target market. Carefully consider, too, one of the most important things VC investors seek: making profits during liquidity events. When founders present a compelling exit strategy during their pitch, they increase their chances of securing investment capital. – Thomas H. Ruggie, Destiny Family Office5. Develop Your Survival Strategy
Tightening economic conditions have made fundraising extremely competitive for startups. Founders who want to improve their odds of raising capital should be able to clearly explain their strategy for surviving the next few years. This includes not only runway, capital efficiency and a focus on margins, but also their competitive edge and differentiation from their peers. – Nish Patel, Inertia Ventures6. Create A Compelling Business Plan
One tip entrepreneurs can use to better improve their odds of landing investment dollars is to focus on creating a compelling business plan. This should include a detailed description of the product or service, an overview of the target market, competitor analysis and a clear financial forecasting model. This will distinguish your business from other investments and show investors its value. – Angelo Ciaramello, The Funded Trader7. Be Ready To Execute Your Business Plan
Make sure to have your pitch deck completed, the team established, and projections and proforma done. You must be able to show the ability to execute your business plan. Investors are looking for sectors with large growth potential and innovation. Showing that you have proprietary technology and patents helps. Most investors want to see that business owners have put their own skin in the game. – Joseph Lustberg, Upwise Capital8. Establish Clear Objectives And Your Value Proposition
Establishing clear objectives and a cogent value proposition will never fail you. Entrepreneurs often build valuable products but fail to communicate the benefits or longer-term goals properly to investors. Highlight the value of your product versus other products, and always ask yourself what the necessary goals for growth are. A compelling value proposition with realistic objectives is key to success. – Anthony Georgiades, Pastel Network