What you need to know when pitching to potential investors
Entrepreneurs seeking new financing for their businesses have been reminded of the importance of making a good first impression when pitching potential investors.
Entrepreneurs seeking new financing for their businesses have been reminded of the importance of making a good first impression when pitching potential investors.
“Dedicate time to practice and preparation for your pitch, commencing with a relatable story that addresses the problem you aim to solve. Investors, like all people, appreciate a compelling story. It’s crucial to research the investor and align your business objectives with theirs,” Timothy Nzioka, the Director of Program Operations for Africa at the United States African Development Foundation (USADF) said on Tuesday.
He was the guest speaker during the latest online Stanbic Business Incubator Limited (SBIL) Masterclass on the topic, ‘Investment-Readiness’. He cautioned that a negative initial impression could lead to quick dismissal of their proposals.
SBIL, a subsidiary of Stanbic Uganda Holdings Limited, is committed to empowering and nurturing the growth of small and medium enterprises (SMEs) in Uganda.
Through its monthly online Masterclass sessions SBIL strives to enhance the capabilities of business owners, guiding them towards achieving their respective objectives by the creating and seizing opportunities, with a particularly emphasis on networking and idea-sharing.
Nzioka shared several invaluable insights on creating a strong first impression that captures investors’ attention. He began by emphasizing the importance of paying attention to details when seeking investment capital, the avoidance of careless errors and the inclusion of all required and relevant business documents.
Nzioka told entrepreneurs to be well-versed with their business operations and relevant statistics. He said, “It’s essential to comprehend your business and communicate your message in a manner that avoids losing investors in technical jargon.”
He also recommended transparency, suggesting that entrepreneurs openly discuss their business weaknesses alongside their strengths, risks, and competitive advantages. “This transparency demonstrates the realism of your business plan and your understanding of competitors, as well as your strategy to outshine them,” he said.
During the Q&A session, prompted by a question from an attendee, Alex Niyonzima, Nzioka advised entrepreneurs to present both the historical business performance and projected figures for at least three years into the future, preferably using graphs to provide a visual representation of growth.
He underscored the importance of maintaining detailed business records, including bank transactions and loan histories, to demonstrate responsible use of external funds, especially in the case of repaid loans. Additionally, Nzioka suggested that grant recipients should solicit references from past grants and investments to underline their creditworthiness.
In conclusion, Nzioka shared a list of potential investor turn-offs, notably incomplete business plans, ambiguity regarding market segmentation and growth strategies, fabrication or dishonesty, and a lack of commitment, among other factors.
