How to Tame the Dragons
We’ve all seen Dragon’s Den. Having been both a “pitcher” and an “investor” over the years I can tell you that raising investment for your business in real life is nothing like that!
By the time a pitch is made, the investors will have already seen the business plan and forecasts and had time to pour over it. This means they’ll be even more prepared that Theo and his gang, so you’d better know your business inside out as they’ll ask some searching questions.
However, unlike on TV, you’ll also have all the information with you and you’ll be able to refer to it during the meeting.
Finally, the fact that you’ve managed to get in front of them at all suggests that they think your business has potential. 90% of business plans that get sent to them don’t get the time of day.
So, how do you go about getting face time with the Dragons? Here are my top five tips!
1. Have a good, sound, commercially viable idea. This sounds like common sense, but if you can’t demonstrate a need, backed up by solid marklet research, then you’re on a hiding to nothing!
2. Make sure you’ve got a great team. Again, it’s not rocket science but an investor is making his or her investment as much in the people as in the product or service. In fact I’ve heard it said by some investors that the three most important things to them in any business is Management, Management and Management!
3. Manage your online profile. The internet is great for investors. Not only can they research your business plan and the market potential / competition, they can also research you. Make sure your online persona, including across all social network platforms, reflects the image you want to portray. If you use Facebook with friends, make it private. There’s nothing that will lose you an opportunity to pitch faster than graphic pictures or inappropriate “banter” with your mates!
4. Keep the plan short. You may be excited about lots of technical data. An investor won’t be. They don’t want to know all the technical stuff, they want to understand what the need is that you’ve identified & how you’re going to satisfy it profitably. Most business plans don’t get read beyond the Executive Summary – so make sure 1. you’ve got one (!), 2. it neatly articulates your business plan & funding needs and 3. it fits on one page.
5. Let the investor know how and when they’re going to get their money back!This is the most important thing an investor needs to know. One VC once told me that only once he knows the answer to that question, and importantly how much he can expectto get back, will he actually ask what the business does!