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How to Persuade Potential Investors

It is understandable that, in the midst of a flurry of pitch meetings and rejections, founders might become perplexed as to what venture capitalists are looking for. To make your business idea a success, you will need to secure the right amount of funding from an investor who possesses the necessary knowledge, skill, and expertise in the industry in which you want to establish your company, not only to provide the necessary resources but also to create a conducive working environment along with a successful business strategy. As a result, having the ability to persuade potential investors is critical. To assist you, Bessemer Venture’s operating partner Jeff Epstein, on this episode of Entrepreneurial Thought Leaders on Stanford eCorner, explains what points to focus on in order to persuade potential investors.

Jeff begins by advising that instead of focusing solely on what you are doing, you should concentrate on what the investors want. According to Jeff, it is critical for founders to be able to tailor their presentations to the preferences of the investor to whom they are presenting. Founders will have a much easier time persuading investors if they put themselves in their shoes first and then begin their thinking process. Investors specialize pitches by risk stage, market sector, and geography, he says. He advises founders to go through the previous investments made by the investor they are targeting and understand what features in the previous pitches compelled them to invest, and then try to fit their pitch into the same theme. Concentrate on the areas of expertise of the venture capitalist to whom you are presenting. This increases the likelihood that they will invest in and be interested in your pitch. According to Jeff, funding reduces risk and increases valuation, making it easier for the idea to improve. Focus on making your pitch appear as low-risk as possible, as investors want to see a business with exponential growth potential, some evidence of traction, and a concrete plan for further de-risking the venture. Jeff believes that raising a small amount of money and proving yourself with that as the first step to proving your potential is critical. This reduces the risk not only for you but also for the investor. This also aids in the development of trust with the investor, which you can use to your advantage in the future when seeking additional funding. Jeff concludes the episode by emphasizing the importance of focusing not only on product development but also on customer relations when using funding, as building a market is critical for making your idea succeed. As a result, selecting an investor with experience in your industry is critical.

As the business is de-risked, more opportunities for larger fundraising rounds open up. It is critical to comprehend the significance of funding as well as the factors that pique the interest of potential investors in your concept. Regardless of how daunting it may appear, you can improve your presentations by using the tips mentioned by Jeff on this episode.

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