Being well prepared to present a project to investors is almost as important as the quality of your idea. New startups are born every day and it’s hard to stand out from the rest.
When the entrepreneur has collected market information, studied the feasibility and has a business plan, the time has come to seek financing! Financing is one of the most delicate aspects when creating a company. You may have your own money to invest in your project, but it is usually not enough and we must look for other ways, such as presenting your project to investors.
However, the intentions of the entrepreneur and the investor are different and, in many cases, we do not know what to present them. Although all the information is important, it does not have to be relevant to the project, raising doubts about what information to select for the presentation. In this article, we will explain how to present a project to investors for financing.
Objectives of the presentation
Before launching to present your project, you must be clear about the objectives of your presentation and, based on that, design a strategy …
- One of the main objectives that you must set yourself is to minimize the perception of risk by investors. We are in a market where trust is a key element, investors are afraid of losing their money and your job is to mitigate it.
- You must show that your company is invertible. Your presentation should be aimed at demonstrating that your project is not a crazy idea, but that it makes sense in the market. Therefore, investors are interested in knowing if it is a feasible project (if it can be carried out), viable (if we are the right people for it) and scalable (if it will cause some growth creating an important business volume that allows the return on your investment).
- With your presentation you should be able to capture the interest of investors to begin a negotiation. You have to be aware of the difference between investors accessing the presentation of your project and providing the basis for starting a negotiation. Keep in mind that investors study many projects but only negotiate with a minority of entrepreneurs, therefore, everything you count and what you do not should be oriented so that the investor is attracted to your project.
What structure should we follow to present a project to investors?
Once we have clear objectives, it is time to prepare the presentation! Keep in mind that you as an entrepreneur are the best letter of presentation of your project; although the idea is very good, if you don’t know how to sell it, you won’t win. Therefore, follow the maximum Keep it simple, present the clear things without complicating your life. Let’s see how to do it …
1) Presentation: Start by introducing yourself as an entrepreneur and your team. The first thing investors want to know is: who are you, where do you come from, what are your motivations, etc. It is where you can get their attention; it is difficult to sell an idea through a PowerPoint, but transmitting the values that a person has to become an entrepreneur attracts a lot of attention.
2) The problem: Expose the problem or need that you have found in the market. We recommend that you explain it as a story since it is more striking. You can tell how you and your team have experienced the problem in question.
3) The solution: At this point, you must present your proposal to solve the previous problem.
4) The product: Fruit of the problem and the solution, what do you propose to solve it. You should not extend too much in this section; it is not the most relevant point for investors as it can change over time and depending on the market.
5) The market: Your business depends on its reactions, therefore, it is what most interests investors. Your goal should be to show that your product fits into it. Who are your customers, what are their interests, how do they behave, what is their volume, etc. Show that there is a market and a great business opportunity!
6) Competition: Market and competition are closely related. If there is no competition, it is possible that the market you are going to is still not very developed. You should talk about your competitors, who they are, what are their strengths and weaknesses and your strategy to get position in the market. It is essential that you never disparage your competitors, for you show your own weaknesses.
7) Business model: Argue how you make money with your idea. You must explain how much money the public is willing to pay for your product.
8) Marketing strategy: At this point, you must explain to investors how you are going to reach the customer and get them to buy your product. What channels are you going to use, with what messages, what are your abilities to do it (if you have experience or will hire someone), etc.
9) Current results: Present the actions you have taken so far, the cost they have assumed and the results they have obtained so far.
10) Growth strategy: To grow you have to invest in equipment, technology, etc. Explain to the investors what financing you need to grow and what you are going to allocate.
11) Financial projections: Analyze the possibilities that your business has at the growth level. We recommend presenting two versions: one moderate and one more optimistic.
12) The proposal: It is the moment when you tell investors what you need them to contribute and what you are going to allocate. Explain that you have a great winning project and convince them that if they support you they can get a great benefit.
13) Questions: If you have been interested in your project they will have questions, calculate a time to grant them.
14) Acknowledgments: Always appreciate your time and interest. It is highly recommended that you rely on a PowerPoint slide presentation that visually explains your argument. Make slides with little text and numbers, taking into account that it is only a script of what you are going to present. Investors should focus on you.
We wish you all the luck in your presentations to investors. Remember that there is no one like you to sell your own product.