From Pitch To Payday: Key Insights For Securing Business Funding Invaluable insights to attract investors and realise your business aspirations.

With today's tough market conditions, investors demand assurance of a viable route to profitability before committing funds.

A recent report from the British Private Equity and Venture Capital Association (BVCA) revealed that the number of investment private businesses in the UK attracted as well as the number of UK-led investment rounds have both dropped by nearly 50% since their peak in 2021, all of which highlights a need for improvement in the country's entrepreneurial ecosystem.

In such an investment landscape, here are a few essential actions that you, as an entrepreneur, should take to attract investors and secure funds for your startup:

1. ADOPT A TARGETED APPROACH

When it comes to finding funding, get specific.

Competition is rife, and David B. Horne, founder of Funding Focus and the bestselling author of Add Then Multiply says that it's essential that founders take time to research investors, and single out ones that are a good fit in terms of sector, deal size, and stage of the business.

"Recently, I was speaking with the managing partner of a mid-sized venture capital (VC) firm in London, and he told me that last year they received over 8,000 pitch decks from companies," he shares. "They made 16 investments- that's 0.2% of decks submitted that led to funding!"

As such, Horne urges entrepreneurs to do their homework, tailor their pitch for each one, and secure an introduction from someone they know to significantly increase one's chances of joining the 0.2% of founders who succeed.

Horne also says that problems tend to occur when founders look at pitching to investors as a single activity rather than a multi-step process. "With angel, VC, and private equity (PE) investors, the process will have many steps, from initial meeting to term sheet, to signed agreement and money in the bank," he advises. "The founder's goal at each stage in the process is to stay in the game and get to the next stage."

2. LOOK INTO ALTERNATIVES

Remaining open to a variety of financing options can propel a brand's growth.

For his sustainable children's footwear brand, Dubs Universe, co-founder Stuart Davis initially raised funds through the crowdfunding platform Kickstarter, allowing the self-funded startup to connect directly with its customers.

"Understanding our audience was crucial; we knew the type of parents we wanted to reach were creative and active on platforms like Kickstarter," he shares. "Leveraging our backgrounds in the creative and design industries, we tailored our messaging to resonate with this audience, ensuring we captured their attention and support."

Additionally, the brand engaged the community through updates, social media, and interactive content. According to Davis, communicating a compelling story about the brand's mission and the unique value of the product, along with showcasing tangible progress and milestones, built trust and confidence among potential backers. "These strategic actions were essential in securing our initial funding and laying a strong foundation for future growth," he says.

Davis encourages other startups to embrace alternative funding sources like crowdfunding, revealing that for Dubs Universe, a tiny startup with no access to venture capital or contacts in that space, not pursuing crowdfunding would have been a significant misstep. "Despite it being daunting and outside our comfort zone, we recognised its potential, and took the leap," he says. "If we hadn't embraced crowdfunding, Dubs wouldn't exist today."

Related: Debt Funding to Propel the Ecosystem

3. KNOW YOUR STUFF

Clarity and confidence in presenting business plans to potential investors can be the decisive factor in securing crucial funding for startups. Sneha Morjaria, an angel investor who's also the entrepreneur behind enterprises like The Growth Chain and OBM Studios, advises her fellow founders to know their stories inside out.

"Be able to explain your business plan, figures, and forecasts- mutual trust is so important when an investor is considering giving you their cash, and the best way you can earn that trust is by being able to answer questions about your forecasts, and how you are going to achieve them clearly and easily," she says.

And once you have explained your story, sell it, Morjaria adds. "Investors, and angel investors in particular, who are investing into an early-stage startup are looking at whether they can get behind your mission and vision," she explains. "So, spend time crafting your story ensuring that you are answering these questions: why this concept? Why you? Why now?"

4. STAY OPTIMISTIC

In business, keeping a good attitude helps both your team and anyone thinking about investing. According to Leo Smigel, a personal finance expert as well as the founder of Analyzing Alpha, investors want to see that you believe in what you're doing, and that you know where you're headed.

"Remember that investors aren't just giving you cash," he says. "They want to back a plan and a group that will work hard and find a way to succeed, even when it's tough. Staying hopeful is key to convincing them to take a chance on our vision."

Passion and enthusiasm are contagious traits that attract support, and staying optimistic during challenges will pay dividends.

5. COME RECOMMENDED

The proof is in the pudding. Zain Ali, founder of Centuro Global, says never underestimate the power of social proof when fundraising. "If you have any happy investors from an earlier stage, put their quotes on your pitchbooks," he declares. "Satisfied customers and clients? Their testimony should stand at the centre of your pitch."

Your peer network is also a valuable resource. A recommendation from a fellow founder to their investor significantly boosts your chances of success. "We're social animals who take our cues from each other, and the voice of real people who've stuck their heads above the parapet to back you is far more valuable than any technical walkthrough or deck design could ever be, no matter how slick," Ali says.

At the end of the day, when it comes to securing funding, it's all about crafting personalised pitches, exploring creative financing options, and tapping into the power of social connections for that extra edge.

Related: 3 Reasons Why A Lack of Funding Could Become Your Startups' Secret Weapon