One of the challenges startups face is securing funding. After all, you need capital to start a business. Most new entrepreneurs pursue funding from venture capitalists. However, these investors won’t easily give you cash. You need to prove that you know what you’re doing and that your business idea has potential. If you have succeeded in scoring a meeting with a venture capitalist, here is how you can prepare.
Do Some Research
You aren’t the only one who will be approaching that investor. There are many other people interested in securing funding. Do your homework so that you know the basics. Getting someone’s name wrong or even misgendering them shows you didn’t research who you’re meeting with. Get to know if the investor is interested in your field and startups in general. Brad Kern suggests collecting as much information as possible to gain insight into a VC’s style and personality.
Write a Summary of Your Business Plan
When starting a business, you need to create a business plan. It’s not just for you but also for the investors you plan to approach. The business plan should highlight your products or services, target market, and other important company information. In your plan, ensure you demonstrate a good understanding of your target market, demographics, and customers. These are things that can incentivize the venture capitalist to fund your startup.
Have an Objective in Mind
What do you want out of a meeting with a VC? This isn’t just for the investor but for you as well. Most people approach VCs with the idea that the investors hold all the cards and will dictate the outcome of a meeting. Your objective doesn’t just have to be only getting funds for the business. It can also be about getting feedback or advice on launching a startup. Coming out of a meeting shouldn’t feel like you were in an answer and question session where you didn’t get any value.
Prepare Your Pitch
Most meetings with VCs are more of a presentation. Prepare to pitch your business idea in an interesting way. Most presentations take between 15 to 20 minutes. If you use slides, let them be your guide instead of repeating what’s written on them. From time to time, a VC is likely to interrupt your presentation. Prepare for this as well, and don’t let questions rattle you.
Know How Much Funding You Need and for What Purpose
The goal of the meeting is to get funds to finance your startup. Ask for a good amount of money, as the cost of starting a business isn’t small. Ideally, you should ask for an amount that will support your plans for around 18 months. Don’t ask for a small amount of money because you think investors are less likely to invest in you if you ask for a lot. It’s business ideas with potential that motivate investors. As long as you demonstrate how you’ll use the money, VCs interested in your idea will invest in it.
The key to a successful meeting with a venture capitalist is preparation. When you prepare yourself adequately, you’ll be confident in your pitch which can motivate investors to fund your startup.
