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3 Critical Components to an Investor Pitch

Investor Pitch

The process of securing investment for your start-up is at times a bit overwhelming. However, the most important thing you can do is build your pitch. Depending on the situation, you may only have a few minutes to grab the attention of the investor and convince him that your idea is worth the risk. While each pitch is different if you can explain why your start-up is a good fit for the investor, validate the market for your business and provide data about the market itself--your chances of finding an investor will soar.

Fit Your Pitch to the Investor

Building your pitch requires more than just cold, hard facts. You must appeal to the investor on a personal level too. Spend time researching the investor. This task requires a bit of work, but the payoff can be huge. Then, once you understand a bit more about the investor you are trying to woo, you can better share why helping you with your start-up may be worth taking a risk. Even if you pitch the same start-up to five different investors--each pitch you create could be vastly different.

Market Validation

Market validation is your chance to prove to the investor that there is a market for your product or service. An investor wants proof that the market exists; this means that the there are customers out there who will buy your product or utilize your service. Validating your market involves spending time “in the trenches.” You may talk with potential customers, determine what needs exist and then further refine the plans of your start-up to meet those needs. You may even ask your customers to pre-purchase what you're selling as a form of validation. The proof you offer in your pitch may be in the form of surveys, interviews, or hard data--each pitch requires a different approach.

Market Research

Once you have shown the potential investor that the market does, in fact, exist, you want to provide as much information as possible about this market. This step is where data and numbers are vital. The potential investor wants to know about the customer base you hope to reach. How big is your market? What competition exists? What does your product or service offer that the competition does not? What price will consumers be willing to pay for your product or service? Answer as many of the investor’s questions as possible, before your potential investor can ask them.

Once you have grabbed the attention of a potential investor, you'll need an effective way share more detailed information. While there are plenty of data-sharing websites online, these services do not have the level of security and ease-of-use necessary for confidential documents. Consider making the information available via a virtual data room. A virtual data room allows you to store information and make it available to only the parties you wish--both within your firm and with the investor. When you have put so much effort into building your pitch, it only makes sense to use the best possible method for taking it to the next level.