As someone who has successfully created a business from the ground up, I know how important it is to save money throughout the process. More often than not, any new project will cost more -- and take longer -- than anticipated. As someone who frequently reviews startup pitches, I highly recommend having a well-thought-out plan in place to reduce the time, effort, cost and energy necessary to be successful. Searching for investors will require a substantial investment of your own, but if you wisely and mindfully use your time, money and energy during your pursuit, you will have a higher likelihood of reaching your goals.
Here are my top suggestions for securing the interest of investors, and eventually raising funds:
- Create a realistic budget to gain traction. Investors consider the best companies to be those with proven traction and customer discovery. You will need a budget to get your first customers and make sure that a business-market match exists. Once you are able to point to reaching certain milestones or successes, you can move onto pitching to investors. Many CEOs dedicate the majority of their energy to pitching investors for a period of six months or more. As a result, you need to understand how much this will cost in terms of travel, expenses and additional fees. Figure out your reliable revenue and expenses for the year, then see where you have extra room in your expense category to add funds for marketing.
- Get to know potential investors. Save yourself time and money by conducting thorough research on potential investors. What are your potential investors like as individuals? Have they invested in businesses like yours in the past? Do the tenets of your business mesh with theirs? Get to know them well enough that you can interact with them on a personal -- and even spiritual -- level. Find investors with interests and beliefs that mirror yours, and your chance of success will dramatically increase.
- Use social media. A strong, positive social media presence can entice investors. Connect with investors through LinkedIn and Twitter and let your personality shine. When you pitch to them, they’ll remember you as the social media star who freely shared inspiration and positivity. Social media is also an excellent way to get to know the investors. Make a note of topics they post about frequently, then use them during your pitch to show that your values and ideas intertwine with theirs.
- Pitch at your level. If you’re just starting out, start small in your search for investors. As a newcomer in the business arena, increase your odds of success by choosing small, lesser-known investors who frequently support your type of business. If, on the other hand, your business is well established and you have a million-dollar idea to expand your brand, then go ahead and pitch to the bigger investors after you conduct research on them.
- Practice your pitch. I recommend crafting an elevator pitch and taking every opportunity to practice it. An elevator pitch is a quick overview of your business that you can give quickly. Practice giving the pitch to strangers, advisers, your grandmother and even your dog. Then, when you stand in front of a potential investor, you can effortlessly speak about your business, the problems it solves, and what you need to make it better. If you are successful with your elevator pitch and the investor has both the interest and capacity to move forward, they will consider providing you with an opportunity to offer a full business pitch for your idea.
- Keep on keeping on. Above all else, keep trying and keep working. If your first pitch doesn't yield results, try again. Focus on the positive aspects of your pitch and learn from the negatives. What did the investors like most? What didn’t they like about it? Take notes, learn, and move on. Meanwhile, continue to operate your business as you search for funds. Investors are more likely to invest in a business that is up and running, even on a small level, than in one that is only in the idea stage. I recently interviewed an entrepreneur who pitched to over 725 investors prior to obtaining the funding he needed for his $1.5M seed round. Even though he heard a lot of "no"s, he successfully raised the capital that he needed and was able to exit that company a few years later for a huge profit.
Stay positive, and most importantly, believe in yourself and your business. Soon, your hard work and positivity will manifest everything you need to make your business flourish.
About: Dr. Roshawnna Novellus, known as the Wealthy Yogi, is the co-founder of Bootstrap Capital and Host of Startup Funding. She is passionate about helping business owners ready to attract funding. Dr. Novellus has been featured in Forbes, Huffington Post, WSJ, and Rolling Out. She has also completed the Pipeline Angels Fellowship, a Kauffman program in angel investing. Roshawnna serves on the Commission on Women for the City of Atlanta, and was honored as one of the Women Who Means Business by the Atlanta Business Chronicle. For capital, coaching, and connections, go to https://www.startupfunding.co/.