UNIFEMGA Investors Forum

It is crucial to thoroughly understand your target market, including who your customers are and how much they are willing to pay for your product or service. Investors will want to know if there is enough demand for your product or service to make it profitable. Do not base your business on wishful thinking or assumptions like ‘People want to buy bread”, “demand for catering service is huge”, “Trust me, I have been running this business for years and always make profit” etc.

• Who is your competition? What makes your product better?
• Does your idea or product have the capacity for growth?
• If your product is already on the market, who has been buying it, and how much have you sold?
• If you have stockiest or substantial buyers interested in buying your product once completed, do you have a letter of intent?
• Do you have the right government and industry license etc? NAFDAC, CBN etc. If not, have you applied for one, and where are you with the process?

Who are your suppliers and how well do you know the best place to stock for your raw materials etc

Visuals such as photos, bring pitches alive while also giving potential Investors something tangible they can interact with. Also, adding stories or anecdotes about products or services adds emotional appeal, encouraging Investors to invest much more willingly.

Besides the product or idea, you’re presenting, don’t forget that a key ingredient you’re putting on the table is yourself! Investors hardly invest in “scruffy or unorganized people”. Thinking that your product speaks for itself and that you don’t have to look the part would be a mistake.

A common cause for an unsuccessful pitch is applicants with poor bookkeeping practice and not knowing or understanding their business financials. Investors require precise and accurate figures regarding the market size, manufacturing costs, retail prices, turnover, margins, gross and net profits, etc. Not knowing any of these answers never goes down well, and it will cause you to fumble and lose confidence – making it difficult to bounce back.

Another issue that many unsuccessful pitches need to improve upon is over-inflating their valuations and having year-on-year turnovers that are hugely optimistic – assuming a flat demand all through the year or constant increasing demand year-on-year. When preparing a Investors’ pitch, remember that overly ambitious turnover figures are off-putting and will be spotted – potentially resulting in you losing out and not receiving any offers.

You will establish that you are reliable and trustworthy if you’re honest. Nobody will invest in your business without scrutinizing the necessary details. Be upfront, from the beginning, about any debts, other investors, or any associated risks that need to be disclosed. When you are truthful, you would be consistent.

Go into negotiations with an idea of what percentage stake in your business you are willing to give away and how much money you need to be injected into your business model for it to succeed. Having these figures ready when you’re preparing for your UIF pitch will help ensure a successful outcome for everyone involved.

Understand that the higher the risk investors are being asked to take, the higher the equity percentage or returns they would want in return. The one investing N10m for 10% equity or 15% return is different from who is willing to invest N25m for 30% or 40% return. Remember that there’s more than money on the table when negotiating. Investors may also bring in their distribution networks, business contacts, and market expertise into your business to ensure its growth.

Have a clear idea of your weaknesses, where to improve, and what you need help with. By acknowledging the gaps in your skillset, you’ll demonstrate your maturity and ability to fill those gaps with an Investor who has what you lack.

Preparing for your UIF pitch takes time, practice, and confidence in yourself and your product. Being well-prepared, business savvy, confident, and enthusiastic, is key for success. Once you have all of the information you need for your Investor pitch ready, you should make out time to practice your pitch. Make sure that your pitch concisely explains why you believe in your product or service and why potential investors should too. Remember that you have limited time to convince the Investors so make sure every second counts. Avoid the following in making your pitch:

• Avoid jargon. Don’t feel the need to fill your pitch with industry buzzwords that don’t mean anything.
• Don’t be patronizing, but don’t assume that they will know all the terminology about your area of business.
• Don’t over-explain yourself or include details that aren’t significant or relevant.

Even if a business pitch to potential investors does not go the way you planned, that doesn’t necessarily mean it’s the end of the road. Many entrepreneurs have since gone on to huge successes after being turned down by some investors.

Either way, doing your research before getting heavily invested in a product, idea, or concept and conducting proper feasibility studies is an essential starting point.