Many new business and startups need a little (or more than a little) help while getting started, especially when it comes to money. That’s how an investor or a small group of investors can help your business.
But how do you speak with potential investors? Here are four tips to help you persuade a potential investor to invest in your business.
1. Skip the small talk.
What should you discuss after saying “hi” and briefly introducing yourself? Avoid talking about the latest viral video, your favorite food, the weather, and other random topics. Instead, get into the main reasons for your conversation.
Most investors want to know about your business and why it’s great. They also want to know how your business will help them. In other words, they want to know what kind of return will they get for their investment in your business?
Will they make money? Can partnering with your business connect an investor with a new market or new group of potential customers for their own business?
Focus on giving your potential investor useful information about your product or service.
2. Know your market.
Is there a large market opportunity for your business? If you don’t know the answer to this question, find out as soon as possible, especially before you speak with potential investors.
You can start with basic Google searches for current businesses that are similar to yours. From there, check out the online/social media presence for these businesses.
If you already know people in your business’ industry, reach out to them to discuss the industry’s current trends and predictions about its future.
3. Be honest.
You probably don’t plan to lie to potential investors, or anyone else. Still, be sure to avoid overselling your product or service.
Your business helps a certain group of people meet an important need or want, and you should make this clear to potential investors. Just don’t exaggerate the results your business provides.
Also, be very knowledgeable about your business and its market. But it’s okay to say “I don’t know, but I will get back to you,” if you honestly don’t know or aren’t completely sure about an answer to a potential investor’s question.
4. Do your homework.
You can’t predict every single question you will ever get about your business. But that’s no excuse to not be as prepared as possible while getting ready to speak with potential investors.
For example, you could rehearse a possible conversation with a friend or family member who acts as a potential investor and asks you questions. You could also show them your business plan.
Final Thoughts on How to Speak with Potential Investors
Many investors will have no problem saying no, and you should be prepared to hear it so don’t get discouraged if you get turned down by a potential investor. Instead, listen to their responses. Then use that feedback to strengthen your business’ story and your pitch.
Also, use these tips:
- Forget using small talk.
- Know your market.
- Be honest.
- Do your homework.
Following these tips will help you boost your chances of getting a “yes” from a potential investor.