How to market your business to investors is similar to marketing your products and services to your target market. You need to establish a presence, build trust, and create a compelling marketing strategy.
Here’s a 6-step approach to convincing potential investors to open their minds, hearts, and pockets to your project.
1) Know thyself.
Before you can go out and sell your project, idea, or cause, you (and your co-founders, if any) have to know it inside-out and be on the same page. Because you don’t want to be giving different answers when investors ask about your vision, plans, or strategies. To them, this could be an indication of a lack of communication or unity. Not ideal for a business they’d pour their capital in. So gather your team to cooperate and coordinate.
2) Know thy investors.
Just as you would identify your target market and ideal customer for your business, you also need to determine the type of investors you want to involve in your business. Make sure to target investors whose vision, values, and ideologies match with yours.
You might think, “Well, can’t afford to be picky. We could really use the capital.” I get you. That’s why you’re pitching to investors, right?
But I must warn you. You don’t want to go down the road where desperate startups have been. They begged for money from anyone who showed interest. Only to realize, later on, that a mismatch between the business owner and investor is a doomed love affair. Don’t commit this newbie entrepreneur mistake.
So before making a pitch to any prospective backer, invest some time painting your ideal investor. Ask questions like:
- How old are they?
- What are their interests?
- Where do they invest?
- What niches do they invest in?
- How much is their investment potential?
Dig up as much information about the decision-makers of private equity firms and venture capitalists. Once you have a picture of your ideal investor, you can then incorporate this information when strategizing for how you’ll market to these financial backers.
3) Play where they play.
Now that you’ve identified your ideal investors, the next step is to let them know you and your business exist.
How? Play where they play. Hang out where they hang out. And in this digital era, you don’t have to practice your swing and rent a golf set to network with potential investors. If you’re not into golf, lucky for you, because deals between startups and investors aren’t typically made on the golf course, unlike other business deals.
So if not on the golf course, where do you find and meet them? Well, there are many online investor platforms today. You can check out AngelList, TechCoast Angels, or Golden Seeds, depending on your type of business, location, or even gender.
Besides these platforms, you also can also find out where they virtually hang out. Is it LinkedIn? Facebook? Twitter? Then establish your online presence there. If it’s LinkedIn, then make sure to optimize your LinkedIn profile to make a good first impression. Then check out the investor’s profile. Find out as much as you can about them. And see if you have a mutual connection who can make introductions. You can also ping the investor. But there are smart and dumb ways to do that. But that’s for another blog post.
Of course, you also need to solidify your online presence with a website and social media profiles reflecting consistent branding. Because when you reach out to them, of course, they’d also want to find out more about you and your startup. They’d look you up before they entertain you or pour capital into your business.
4) Build relationships and network.
Business relationships can open new doors not just to funding, but to other opportunities as well. You can also learn a lot from the people in your network. That’s why attending networking events is worthwhile. And besides, you can’t expect an investor you just met to sink their money into your project overnight. So keep showing up at such events to create awareness of your brand and at the same time build rapport with potential investors.
Also, statistics show that referred customers have a 16% higher lifetime value than non-referred customers. I guess this also works for seeking investors. So be referable by satisfying customers, maintaining good rapport with suppliers, and delivering results for current investors. And don’t be shy to ask to be referred. On the other hand, don’t be stingy with referring others to investors you know. You’d be providing value to two parties. This is hitting 2 relationship-building birds with 1 stone. By doing that, they’d also be more likely to refer you.
5) Think how they think.
To do this, may I suggest two ways?
FIRST: Think about what information investors would want to know about your project.
They’d want to know how you’ll spend their investment, where the business is going, how profitable it is, and other related topics that affect them and their investment. You can present these pieces of information by making any of these materials:
- An investment opportunity slide deck
- A Powerpoint presentation
- A two-page executive summary
- An FAQ document
- A financial model
- A video presentation
Many startups now incorporate animated videos into their investor pitch decks to solicit investors. Videos are attention-grabbing. They make complex ideas, products, or business models easier to explain. And it allows you to present even to investors in a different state or country you’re in.
If you need a professional to help you create a video to introduce your company/brand to your investors, explain your product, idea, or business model, contact PixelFish, and we’d be happy to help.
Take note, these materials are avenues for you to showcase you and your brand. If executed well and professionally, your material can set you apart from your funding competitors.
SECOND: Think of reasons why an investor wouldn’t invest
This is to preempt their objections before they have the chance to raise them or walk away. Go over your business plan and spot anything that would turn investors off by asking yourself questions like:
- Is your business idea sustainable?
- How risky is it? How profitable?
- Are growth opportunities limited?
Then prepare an FAQ Document to address these questions and objections. Be sure to cut the BS. Preparing this document will also show them you are proactive and have thought everything through.
6) Wow the Audience
Studios and networks draw you to the movies with trailers, so think about including a teaser video in your meeting invite. Use it as an opportunity to introduce the concept, the problem, or your team. Follow up with a video to open the meeting. Outline in a 60 – 120 second video the highlights of the presentation. Others have utilized video to showcase their entire presentation, providing a brochure of the slides to discuss particular items after the video.
Video content is a great tool to break the ice and wow your audience with your marketing capabilities and know-how.
With these 6 steps, we wish you success in your fundraising campaign. If you need a pro for your video presentations or just explore more about possible video ideas you can use for your business, feel free to reach out to us.