How To Convince Investors To Support Your Idea
. All business ventures start with an idea. They also require some hard work. However, you might have the best idea in the world and be the most hard-working person and yet there is a good chance that your startup will fail. According to CBInsights estimates, 29% of startups fail because they run out of cash. This makes it the second most common reason after lack of market need for the product. To avoid making your business part of this sad statistic, you need to find ways to finance your project. The best way to fund your startup is to raise capital from outside investors. However, venture capital and angel investors get thousands of proposals to back various projects every week. Therefore, here’re some suggestions about how to convince investors to support your idea. In addition, we’ll also explain how Ideaction can help you avoid a lot of the hassle.
Make Sure Your Idea Can Appeal To Investors
In the paragraph above we said that the main reason why startups fail is that their product has no market need. And while you might think that the market need is not necessary as long as you get to see your idea come to life, investors think otherwise. That’s why even before you try to convince investors to support your idea, you must identify its market need.
Moreover, after the market need, you must estimate the revenue potential. Investors don’t care about your idea, they care about how much money it can make them. It may very well be that there is some emotional story behind your idea and the decision to turn it into a product. But if your idea doesn’t make money, you should consider other ways to get money instead of going to outside investors.
Another way to appeal to investors is to show them something. A presentation may work well, but showing them what the product is going to look like is even better. And there is nothing better to showcase your product than a minimum viable product (MVP). The MVP presents the design and visual aspect of the product, but it also includes some limited functionality. It’s much cheaper to develop than a full-scale product. At the same time, it will be aesthetically pleasant and functional enough so that you can show it to investors. Even if you have limited capital and don’t have a team yet, we can help you build a great MVP.
Find The Right Investor
In order to increase the chances of getting money for your project, find the right audience. This means making sure that your idea resonates with investors. Many investors focus on specific areas and industries. Do your homework and see what other successful projects these investors backed in the past and try to find some relation between those products and yours.
Additionally, you’d want to make sure that your idea resonates with the investors. See what their interests are and focus on them in order to capture their attention. Of course, looking for the perfect investor to hear you out will take more time and it significantly limits the pool of potential backers for your idea. However, at the end of the day what matters is to get funding for your future enterprise, so this work will result in a bigger probability of payoff.
Prepare A Kick-Ass Pitch Deck
A pitch deck is a brief presentation (accent on brief) that provides a quick overview of your business plan. It is an essential tool in fundraising. The presentation should be on point, present only the main aspects of your startup and do a lot of its talking through numbers. Keep it under 10 slides and make each as informative as possible.
The pitch deck should mention the problem you are trying to solve and how you are planning to solve it. Identify the market and revenue potential early in the presentation. Mention some timelines, such as when you expect to have an MVP or a beta-product, when you expect the project to start making money. This will show investors that you are also committed to the project’s profitability. They might also use it to make some of their own estimates of when to expect to see some returns.
Talk about yourself and list your accomplishments. If you have a team, describe your teammates. This will help convince investors to support your idea by presenting yourself and your teammates as a dedicated and driven team. You can also take a look at the pitch decks of some of the most successful startups that raised millions of dollars for inspiration.
Ideaction Can Help You Convince Investors To Support Your Idea
Our goal at Ideaction is to help entrepreneurs bring their ideas to life. We can provide many services associated with product development. This includes everything from market validation to design to building an MVP to releasing a full-scale product and providing maintenance.
However, we aspire to do more than that. We are also ready to undertake tasks beyond product development. This includes conducting a market analysis to estimate revenue potential. In addition, we can help entrepreneurs raise money from investors. Either by helping you develop a great pitch deck or actually going to investors and present your idea, you can count on us. Take a look at our offer and get in touch with our business development team to find more and get started.