Pitching for investment?

John Courtney of Boardroom Advisors explains the importance of knowing your market when attempting to attract investors.

Pitching for investment?

When preparing your investment pitch, you need to keep your focus on your main aim. First and foremost you need to ease any concerns the investor may have regarding the risk they are taking by investing in your business. They need to be convinced that your business is both viable and sustainable. The best way to achieve this is to describe in detail your business and the marketplace.

Whenever you prepare a pitch, you need to carry out serious groundwork first. And none more so than researching the relationship that your business has with the marketplace. In this article I will talk you through all of the key points you need to consider when developing this vital segment of your pitch.

Which gap in the market does your business occupy?

This may well be the first question an investor will ask you. And you need to provide a strong answer. You need to explain convincingly where, in the marketplace, your business sits. This should be relatively simple because, when you started your business, you will probably have done so after spotting a gap in the market.

Your business may have already solved this problem, and there are two distinct problems to solve. Firstly, there was an existing problem to solve and, secondly, you have created the problem which required solving. Both are perfectly valid reasons for starting a business.

Solving an existing problem?

The trick is to make the problem sound as big as possible. You need to convince the investor that not only is this a problem that requires solving but, also, that there will be a large customer base waiting to pay for the solution. Prove that your business can gain traction in the marketplace because it’s a big problem that you’re solving.

Have you created a problem that requires solving?

Solving a problem that you’ve created is mischievous. You are simply presenting a problem that your customers didn’t even realise needed solving. Once again, your job is to explain to investors two things. One: You can convince your customers of this ‘new’ problem; Two: Because, of this, you can grow within the marketplace.

You may be solving a problem that other companies are already attempting to solve. This is not necessarily an issue but it does mean you will have to prove to investors that your business is better than all of its rivals. You will also have to show how your business will occupy a large share of that particular marketplace.

Give your investors exactly what they are looking for

They will want detailed knowledge of your competitors and how exactly you plan to perform better than all of them. If your business is already trading, you need to know precisely where in the marketplace you are currently occupying. And how do you seek to gain a larger share?

This comes back to the easing of investors’ concerns. You will need to demonstrate that you possess an actionable strategic plan. One which highlights the path your business will take in order to grow within the marketplace.

This strategic plan should also answer another question that investors are likely to ask. Which other markets are you looking to enter? Your pitch should illustrate that your business plan aims to gradually dominate your marketplace, while also explaining your vision with regards to future markets.

Perhaps, after a year, you will seek to enter international markets that will expand your customer base and accelerate your business growth. Whatever your mission, you need to have a detailed map that confidently highlights the direction you wish to travel in.

Align your investor pitch with your strategic plan

It’s no use simply saying where you want to go. You need to show exactly how you plan to get there. You need to understand the marketplace, as well as have a detailed knowledge of your product or service. There must be a marketing campaign prepared, and you need to be certain where your customers will be found.

An investor needs to be confident that you know where your business is, and where it plans to go and, more importantly, how you envisage getting there. By knowing the marketplace, and identifying your competitors, it makes it easier to develop an actionable strategic plan. The investor won’t bite if they have even the slightest issue of doubt about your business plan. Do your research and know your marketplace.

This feature was brought to you courtesy of Bristol-based Boardroom Advisors which was founded by John Courtney. To make contact: Ring 0117 300 9945 or write to [email protected].

John Courtney
John Courtney

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