In this article, I would like to show you how to pitch your idea to investors in 5 minutes and secure the funding you need for your startup.
Selling business ideas to investors is a growing trend in Africa. Investors, local and foreign, now believe Africans have something to offer and they are willing to buy in at first stage. Most governments also leverage on this to help reduce unemployment rate across the continent. This they do through setting up entrepreneurship schemes (like the YES program and the recent N-Power program by the current Government of Nigeria) where young people are requested to send a proposal on their business idea, these proposals are vetted and those with bankable ideas are invited to defend them.
This method has gone a long way to seeing many young people out of the street, thereby defeating the myth that one cannot start a business “without money”.
Now before I advise the Next Nigerian Entrepreneur on how to pitch your ideas to an investor, you must first understand why you need an investor in the first place and what role they can play for your business growth.
Why we need investors
As a young prospective entrepreneur without capital, you need investors to raise money to bring your idea to life. A good investment boosts your moral; it also gives you this extra motivation seeing that someone actually believes in you.
Also, if you wish that your idea/startup must live beyond you, seeking investments from outside source helps make this a possibility.
Another important reason we need investors is for growth. Maybe, you already have your business off the ground and it has been widely accepted, you need funds to grow the business so you can meet demands, beat competition and expand.
How do you pitch your idea to an investor?
Anyone willing to invest has profit at the back of their minds. An individual investor wants his money to make more money in the nearest future, the government wants you to start making money so you can not only reduce the problem of unemployment but also to pay taxes when your business starts generating profits.
That being said, you need to prove to any investor that their money and time will not be a waste (wasted effort). First, you must be confident and believe in yourself.
“The mind is everything. What you think, you become.” – Budha.
Second, you need a Positive Mindset. See How to develop a positive mindset.
So to convince an investor, here are my best 5 tips to pitch your idea in 5 minutes.
- Start by telling them the origination of your idea and why you believe so much in it.
- Tell them the problems your idea can solve.
- If you already started but need expansion, tell them about your success with verifiable facts and why you need their money.
- Explain the niche and market, and if there are competitors, vividly state how you can offer the market a better product/service thereby outwitting competition.
- Tell them how you plan to assemble your marketing team, finance department and most importantly, how they will be getting their ROI.
These are my best suggestions to any entrepreneur seeking funding from investors, but remember, your appearance, countenance and boldness matters a lot. Those can best be achieved if you really know what you are doing and how passionate you are about your idea/startup.
I suggest you also read these resourceful articles:
- Seed Investment Funding Options in Nigeria
- Startup Lessons for Young Entrepreneurs
- How to develop lucrative business ideas
- How to write a business plan that attracts investors
You can also Google about “Andella”, the Nigeria startup that recently received $24M investment from Zuckerberg foundation and see how they did it. I hope you have learned how to pitch your idea should the situation arise. I’d be interested to hear your questions and contributions. Cheers!