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Right now there is no shortage of interest among investors looking to back profitable ventures, with millions looking to make amends for opportunities lost during the COVID-19 crisis.
All of which paints an appealing picture for businesses and individuals looking to bring private investors on board. Whatever type of project you are planning, funding it through private investments could be an option.
Before you begin pitching yourself and your project to potential investors, there are a few important points to consider. Each of the following will play a major role in determining the outcome and therefore should be considered carefully:
Have you clearly defined your objectives?
Having a rudimentary idea of a project for which funding is needed is not enough; in order to appeal to investors, you need to present clear and concrete objectives for your initiative.
They need to see in no uncertain terms what you intend to achieve, how you intend to achieve it and when. When seeking the support of private investors, there is no room for ambiguity or vagueness.
What is your key selling point for the investor?
One of the few things all investors have in common in the way they share the same overriding priority.
Pitching a project to investors is the same as selling products of any kind to a prospective buyer; chances are they are regularly presented with a wide range of investment opportunities and project pitches. Your job is to convince them that there is something about your project that makes it worthy of their backing.
Communicating the USP of your project should be the first thing you do, it is essential for nailing that all important first impression.
Are your figures clear, complete and convincing?
You can wax lyrical about the merits of your business until the proverbial cows come home, and still get nowhere; for the established investor everything is in the numbers.
The investors you approach will see you and your project in a purely numerical format. They want to know that the sum of money they put in will result in the near-concrete guarantee of a specific return.
Consequently, the figures you present them with need to be clear, complete and as convincing as possible. All without making the mistake of overstating your capabilities as this could jeopardise your credibility.
Are you targeting the right investors?
Just because somebody is a high-net-worth individual with a ton of investment experience does not mean they are right for you. They may not share your priorities or your objectives, just as they may not have experience in your exact niche.
Desperate to secure funds by any means necessary, businesses will often cast their nets far too broadly.
You owe it to yourself and your business to be strategic and selective when approaching investors. Just in the same way an investor will be selective when choosing which projects to back.
