When everyone is happy with the business plan, it needs to be turned into a professional presentation, which should communicate memorably what the business does.
If the core purpose cannot be explained in 30 seconds, the pitch is too complicated and investors will lose interest before the client has a chance to get into the supporting facts and figures.
The old cliché about identifying a “unique selling proposition” still applies even if it may have been overtaken by newer management jargon.
It is essential to practice the presentation several times before seeing investors. I have seen the credibility of some seriously good projects destroyed by a hesitant delivery and worst of all when the technology gets the better of the entrepreneur.
Most presentations these days are done in PowerPoint, but there should always be hard copy sets of the slides available in case the projector bulb blows or the PC crashes.
The questions the investors might ask should be anticipated and strong well-researched responses prepared. Once in front of the potential investor, the approach needs to be open and not defensive.
There will be detailed questioning and the entrepreneur and his team must be able to demonstrate why their skills and experience will justify the risk the investor is being asked to take.
Holding your nerve
One regular mistake is not raising enough money. If an idea is sound, a professional investor will be happy to put in a little more, if it gives the business a contingency fund to deal with the unexpected costs and problems that are inevitable with all new ventures.
Going back later to ask for more is usually difficult unless there is a very good reason why the extra requirement wasn’t anticipated at the outset.
Entrepreneurs must also be realistic and get guidance about the potential value of the business. They need to be willing to give up a significant share of the action. Investors will want a meaningful stake in the company.
They will also want a good return on their investment and a planned exit route so that they can see how they are going to get it back.
Raising money for new ventures is difficult at the best of times, but good consultancy advice and a professional approach can prevent it becoming mission impossible.