How to convince investors of your idea? Use the right tools to display your strengths.
In the previous article I went through some of the most important aspects investors value when deciding upon the investment in your startup. This qualitative analysis also plays a big role in the valuation that the interested parties will attribute to your startup. Therefore, it’s better to be aware about your weaknesses well before raising funds. Especially when the business is still unproven, entrepreneurs should take all the necessary steps to have a sound business case much more than creating outstanding projections. This is what we’ve learned in the past lecture, but the unsolved question is:
How do I attract investors’ first interest?
Well, you don’t need me to explain you what the main channels to create buzz or contact angels are. This is not my purpose. I’m here to suggest you some of the tips you may want to keep in mind when executing your communication plan. In whatever kind of communication effort, being written or oral, there are some principles which may be applied to get to the main target: people’s attention and, eventually, interest.
From our experience with angel investors, they receive tons of Business Plans every year. Needless to say they hardly read the first paragraph. They are so much swamped with investment opportunities that they don’t mind missing a good one as they know more will pass. As a consequence, they developed some “screening techniques” that enable them to pick some winners in a relatively short amount of time.
As the serial entrepreneur and experienced angel, Frank Peters (from Tech Coast Angels, CA) told us: “I hardly dedicate more than 1-2 minutes per business plan or Executive Summary. If I see potential, then I do want to read more, but most just end up in my trash folder.” I elaborated Frank’s and his fellow colleagues’ indications combining them with those of other investors I’ve been pleased to meet throughout my experience with Liquidate:
1. Elevator pitch
Describe your company in few words. Don’t be afraid to pass or fail. Some investors are just not interested in some sectors.
2. Be concise
No more than a 2-page Executive Summary. If you can’t say enough of your business in two pages, how can you convince your customers to buy your service/product?
3. Highlight important issues
Investors want to know your stage of development, team overview, advisors, milestones achieved and other useful KPI’s about the past performance.
4. Have a neat layout and style
A two-column layout is usually the preferred one, with a left smaller column to highlight many concepts and a larger right out to elaborate them. Use a readable font and don’t squeeze the words like canned beans.
5. Use graphics wisely
You can enrich your ES with some graphical elements but make it functional to the communication of your key values, not just ornamental per se. One-page logo is a “DON’T”.
6. Provide your contacts
If you are lucky to be picked, than make sure they can easily contact you back. The footer is a good place for that, don’t use it for confidentiality notes.All of these and more may determine whether investors will, at least, consider your Business Plan/ES and not throw it in the trash folder. Don’t let your idea be left without an investment! Read Frank Peter’s original blog post to get more guidelines for Executive Summaries and stay tuned! In the next article we will focus on how to ask investors for money: be brave, but prepared! Check out the image below for the quick overview of this post.
posted from :http://equidam.com/blog/how-to-get-investors-attention/