3 Tips for Pitching Your Business Idea to Venture Capitalists

by Sean Ross

2 min read

Many new small businesses get started by a person with a new business idea who then has to find the necessary capital to finance the launch of the business. One financing option is venture capital. Venture capitalists are either private individuals or venture capital firms that invest in new or growing businesses in return for an equity interest in the business that they hope will show them a generous profit within a few years. The competition for venture capital is strong. If you’re pitching your business idea to either an individual venture capitalist or a venture capital firm, it’s vital to make the best presentation possible.

Be Concise

Venture capitalists spend hours listening to presentations from entrepreneurs who are seeking investment capital. Make your presentation stand out from what they’ve already heard. One of the best ways to make your presentation memorable is to keep it concise. Communicate all of the necessary information that could help a potential investor make an informed decision, and hone your presentation to emphasize the most compelling points that could convince an investor to back your idea. As potential investors mull over your proposal, they aren’t going to remember everything you said in a presentation; hammer in some memorable bullet points that are likely to stick in an investor’s mind.

Back Up Your Idea With Facts

Venture capitalists are looking for answers to two questions when they’re listening to business idea pitches:

  • Will this idea fly as a business?
  • What kind of return can I expect to realize from investing in this business?

To secure financing, you have to answer both of those questions in your presentation. Therefore, you have to do your homework, such as market research, and come prepared with specific and realistic numbers for projected costs and projected revenues. Show investors that you have a firm grasp of the marketplace you’re proposing to enter, your target customers, and a unique selling proposition that will make your business more successful than potential competitors.

Be Entertaining

Listening to business presentations for hours on end is not the most exciting occupation. If you can entertain as well as educate your potential investors – if you can lighten their business day with a laugh – then you can get a positive reaction to your business idea. For example, one venture capitalist related a story about a presenter who showed up to a presentation otherwise professionally attired, but wearing bedroom slippers. The presenter’s eccentricity was a major factor in catching the investor’s interest, which ultimately led to his deciding to invest in the business. In putting together the pitch for your business idea, be sure to make your presentation stand out as different and memorable, present compelling evidence that the idea as an excellent investment, and pare all of that information down into a concise and hard-hitting presentation.

References & Resources

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