It's hard to believe that in 2021 women still have more of a challenge than men when it comes to raising money. According to many reports, teams lead by women raised only 2.2 percent of available capital just in 2017, versus the 79 percent that men-led teams acquired. Although we have seen improvement over the last several years, we still have a long way to go. To address this imbalance, women need to learn what it takes to make a successful pitch to investors.
Over the years, I have found several resources that have helped my clients and me through the process. Female founders must know the right strategies that will work for them to find success when raising capital.
Practice your elevator pitch
Practice, practice, and more practice. You have to execute the right elevator pitch, utilize the right platforms, and practice with the right people. For me, Clubhouse has been a great tool to not only network but also practice my pitch with investors, peers, get feedback from trusted advisors and listen to other's pitches.
Develop and work on your pitch until it just can’t be any better and you can answer any questions that may come your way. Be an expert and know your idea and your business inside out. You only have a few minutes to sell your proposal and make an impression on a potential investor, so make it count!
Perfect your storytelling and company vision
Part of pitching is storytelling, so make sure you tell a good one. Study the art of storytelling and figure out the right way to present your idea in a way that will allow investors to get a clear understanding of your business. They need to understand what service/product does, what problem it solves, how it will change the marketplace, and who your target audience is. Your presentation should answer all of these questions and tell the right story that will allow them to buy into your brand vision.
Do your research first
When seeking out angel investors, do the proper research before taking the following steps. Make a list of investors or investment groups that can invest the amount you are looking for in your industry, at your stage of development, and in your region. Who and what are the sources of capital? Do your homework. Find out who these individuals or groups are. What is their background, and what kinds of opportunities do they invest in? Who do you know who knows these people?
Network and build the right relationships
Once you have done the homework, the next step involves relationships building and networking with the right people. Explore the list you have made to figure out the right angel investors in the entrepreneurial ecosystem in your market.
Remember, you are looking for what works for your business. You don’t need to pitch everyone. While you should be open to all pitch opportunities, you should also explore the opportunity to pitch in front of female-focused angel groups. This advice also goes for more diverse angel groups and VCs that better represent the world in which we live.
Build the right team
Make sure you have surrounded yourself with the right team of people and advisors. During your pitch, these key players will play a huge role. Investors want to know that you have a solid team of people that have the right skills and experience that can assist you in taking your company to the next level. Investors need to know what they do for your company, what impact they have on your bottom line, and why they are the right fit for your company.
Be confident. You shouldn't be hesitant to answer any questions. You should be able to convince an investor that you are an expert, that you have a deep understanding of your business, and a good grasp of the numbers. Remember, investors are not only investing in your business, but they are investing in you.
Prove to them that they can trust your leadership.
Share your business plan and know your numbers
Explain your business plan and economic paradigm for your product/service. How will you generate income? What is the potential revenue plan and what kind of margins can you expect? Who are your current clients (or beta clients) and what is your likelihood to generate revenue? How soon will this happen? Your pitch should address your potential sales plan and your growth strategy.
Be realistic, but think big.
Be clear about what you want
In life, you should always be clear about what you want especially when you are talking to investors. For them to make the right decision, they need to not only be confident that you would be a good fit for them but that they can meet your needs as well. Be sure to state how much money you are asking for and what you plan to do with it. What will the investment help you do? How will it get you to the next level of growth?
Clarify your exit strategy
This step might not apply to everyone but if it does apply to you, make sure you make it a part of your pitch. What does your strategy look like for an exit? When do you plan on activating it? Who do you think are possible acquirers? Do you have any relationships with these companies/people that you can leverage when you are ready?
Investors want to know that you have thought about your long-term plans.
Follow up with investors
After your pitch, take a minute to breathe. Be proud of what you have accomplished and the time you have invested in the process. However, don't forget this important step and that is the follow-up. Be sure to send a follow-up message within 24 hours to answer any concerns or questions. Take that opportunity to clarify any issues, double down on any important facts and make additional touchpoints. This will make you stand out from the rest and shows that you are on top of things.
Remember, you only need one “yes” so take the no's on your chin! I hope these tips help you get one step closer to getting the funds you need to achieve your startup success.