Women have more of a challenge than men when it comes to raising money. According to Fortune Magazine, all-women teams raised only 2.2 percent of available capital in 2017, versus 79 percent for all-male teams. To address this imbalance, women need to be keenly aware of what it takes to make a successful pitch to investors.
As the founder of the Next Act Fund, a woman-focused angel fund, I believe that the following suggestions for female founders seeking funding could make all the difference in your success (or failure) when raising capital.
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Build your network
Even before you are ready to start fundraising, it’s a good idea to start building and enhancing your network. Start by exploring the angel investing and entrepreneurial ecosystem in your market. 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?
Remember, you are looking for the best fit 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.
Practice your pitch
You need to be the very best sales person for your idea. After all, no one else can pitch this idea better than you can! Develop and work on your pitch until it just can’t be any better. Spend the time to practice and be prepared to answer questions. Know your idea and your business inside out.
If you get the chance, try to watch other individuals pitch their businesses so that you can learn from them. When you practice, make sure to get feedback from trusted advisors or friends. You only have a few minutes to sell your idea and make angels want to invest in you, so make them count!
Related: Top Small Business Grants for Women and Minorities
Believe in yourself and your business
Show your expertise, your confidence and your grasp of the numbers. You are your business in the eyes of the investors. Remember, we are investing in you and your idea. We have to be convinced that you are the person to do the job, and you are the one who will make that happen!
Practice your storytelling skills
Become a good storyteller, and remember, “Investors invest in things they understand.” If investors are not likely to use the product or service that you’re pitching, they need to understand what problem you are solving and how it will change the marketplace. Who do they know that would be impacted by your product or service? You’ll need to answer this question by telling a story.
Know your numbers
Use real data to help support your idea. Get feedback from potential customers that you can share in your pitch. Define the market opportunity and market size.
What does the space you are disrupting look like? How is your product or service unique and how are you protecting your idea? Share your potential sales plan and marketing approach to generate growth.
Talk up your team
Talk about your team and your advisors. How are they relevant to your business and what will they be able to do for the company? If you have prior (relevant) experience, make sure to share it.
Share your business plan
Describe the business plan and economic model for your product or service. How will you make money? What is the potential revenue plan and what kind of margins can you expect?
Talk about your growth strategy. Be realistic, but think big. Who are your current clients (or beta clients) and what is your likelihood to generate revenue? How soon will this happen?
Be clear about your ask
Be sure to state specifically 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?
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Have an exit strategy
Investors are interested in your exit strategy, so make this a part of your pitch. What does the landscape look like for an exit? Who do think are possible acquirers? Do you have any connections to these companies that you can leverage when the time is right?
Follow up after your pitch
After you’ve pitched your business, be sure to follow up within 24 hours to answer any questions. This gives you an opportunity to clarify any issues, lets you make another touchpoint, and shows that you are on top of things. It can also help you stand out, because not everyone takes this step!
Remember, you only need one “yes” to get the ball rolling! Use the following tips to get your entrepreneurial dreams funded, and you’ll be one step closer to startup success.
This article was originally published in October 2018.