In the first of our two-part pitching series for entrepreneurs, we discussed how you can build a connection with investors, define a vision for your business and look beyond home for potential investors. We also saw how you, as an entrepreneur, hold the bargaining chips when navigating the world of investors and how you should find the centres of influence and focus your efforts in pitching.
This time round, we have some more advice which will together complete your armoury. With this ammo, you are sure to make the right kind of impact on the ecosystem. So, read on!
Think global, not local
When it comes to building a business, majority of entrepreneurs in Asia think locally or regionally. However, if you need to succeed, you should envisage a global business from the start. The more global minded your business is, the easier it is to adapt when you find a willing investor who wants you to test the product first in his/her market.
Identify the hierarchy
At the early stages of fundraising, you hardly meet the investor who sits on top of the pyramid. You will probably encounter an analyst, who would take down notes about your startup and pass it up the ladder. These notes will pass through the chain of command before reaching the decision maker. Understand that at each step, there is someone summarizing your offering in the best way that they understand it. A lot of potentiality of your product/service could be lost in this translation. This awareness will help you prepare a pitch that echoes with clarity and value, and impacts the listener in the right way.
Prepare questions for the VC
Every time you get an opportunity to pitch, ask questions. This will help you uncover the investment philosophy of a potential investor. Why are they looking to invest in this space? What is their vision? Are they purely interested in financial gains or are they driven by the greater good? While this may seem a tall order when given a few minutes to pitch, but it builds respect in the minds of potential investors when you ask questions. They realize that you have holistic knowledge and are thinking about the business environment in the space. Reversing the roles sometimes is very interesting and people will remember you for that.
Start pitching way before you run out of money
Fundraising always takes longer than estimated. Like they say, there’s many a slip betwixt the cup and the lip. So, it is sensible to raise money before you run out of it. While conventional wisdom indicates that it takes three months to raise capital, it is highly recommended that you pitch six months to one year in advance to stay operational and sane. Remember, it always takes longer than you think it would.
Show, don’t tell
It is natural for any person — whether it’s an investor or not — to see things and understand it. So, as an entrepreneur, showcase your vision rather than simply talk about it. At Tribe Theory, we want to build an ecosystem that includes the hospitality business, an academy, a talent agency, a venture capital fund, a media business and then some. We translated this vision into reality in small but meaningful ways before we began to raise seed money.This showed initiative despite many of the products being at their early stages of inception. But we displayed a skeletal system to prove to them that we are a driven lot who are worth investing in. Showing more than telling, will always help you raise money.
It may seem skewed that you get merely fifteen minutes of spotlight to impress the people who seem to hold all the cards. But that is truly not the case. The more you understand the psychology behind pitching and build your business with vision, clarity and hard work, you are bound to meet the right people and raise capital. While it may not always be an instant win, as entrepreneurs, we must remember that Rome was not built in a day, and neither will your business.