As any aspiring entrepreneur can tell you, running a business costs a lot of money. Believe it or not most people are not independently wealthy when they go to start a business. They face the age old dilemma of how to raise money so you can make money. The primary source of startup investment comes from venture capitalists, though there are other sources.

A VC’s job is to find ideas and products that need investment in the hopes that the idea will “go big” and produce a nice ROI for the VC’s firm. If you want to run a startup and need cash to grow your business, knowing how to pitch to a VC is absolutely essential. Here are several key points that can benefit any potential entrepreneur preparing to pitch an idea to a VC.

Research, Knowledge, and Expertise

There are few things that can sink an investment opportunity than a lack of research. Remember, you only have one opportunity to impress a VC, so knowing your stuff is key.

Make sure you research the firm, and the firm’s partners, to whom you are pitching. You want to make sure you know that the firm is a good match for you, and which partners will be a good fit. For instance, if you are pitching an app, find the partner at the firm who is most familiar with technological startups and ideas. It not only shows that you did you research, but can also provide you with an excellent source of information about your market. Remember, VCs see hundreds of business pitches weekly and probably know as much or more about your market as you do!

Research your product, and your market. If you go into a VC meeting knowing little about either your market or your product, it will sink your chances of investment in qa testing services. You should talk with experts in your field prior to your meeting. You should know the market feasibility of your idea, know your competitors, and know similar products. Know your topic in and out, and show VCs that you do. Expertise is impressive.

Having a working MVP, prototype, or canned demo can all show VC’s your expertise in a very physical and concrete manner. Coming to an investment meeting with an MVP or working prototype shows that you not only know what you are talking about it also shows that you can make your product or idea. Even a canned demo is better than a simple presentation – though if all you have is a presentation, GO ALL OUT! Spend money and time to make it look good.

Respect, Dedication, and Flexibility

Be nice to everyone involved in the meeting! You never know who the VC may consult for advice on you or your pitch. If you are polite, attentive and ask questions of everyone in the room, you can impress everyone with your charisma. Remember, investors are investing in you first and your idea second, so don’t be afraid to turn on the charm and blow the socks off everyone in the room. Charisma, passion, and dedication are all things that VC’s want in a founder.

Don’t try to outsmart a VC. They’re probably smarter than you are, and definitely know more about your target market and your competition. You do not want to upset them. Don’t try to hide issues with your model, because a VC’s whole job is to seek flaws in your ideas. Be up front and offer possible solutions to any problems instead. This will impress VC’s with your honesty and forethought. VC’s also like founders who can be mentored and who are transparent, so honesty behooves you.

While respect and honesty can impress a VC, a stellar pitch that demonstrates the founders dedication is a must. How much money and time have you put into the idea? If you haven’t, why would anyone else? Any pitch should absolutely cover how much of the founder has put into the idea because it shows VC’s that you can be counted on to follow through. An MVP is the best way to demonstrate that you can succeed, because it shows that not only can you build your product, but there is some interest in it. Remember, the first question VC’s ask themselves is “will this idea be big?” So show them that there is interest in your product, and that you have the dedication to make your project succeed.

Be flexible with your idea. Markets are shifting all the time, so make sure you are capable of shifting and pivoting your idea to suit new market needs. No VC wants to work with a founder who is unwilling to compromise any part of their idea. Remember that business is dynamic, and you should be as well.

Ambition and Temperance

You are selling yourself and your idea to potential investors. Show them your excitement and aim for the sky, but be willing to temper your passion with realism. VC’s want a founder who is willing to grow, but is realistic about growth. Come to the investment meeting with a long-term business plan and goals for growth, but make sure the goals are achievable. A VC makes money when you do and always want a high ROI, so be prepared to show them you are ready to grow, and to grow sustainably.

You should be aggressive with your pitch, but avoid being arrogant. Cockiness can cause a VC to worry if you can accept direction, while passiveness indicates to a VC that a founder isn’t passionate about their own idea. Make sure you strike a good balance between high ambitions and realistic expectations. An investor likes an idea that starts small, but builds big.

Innovation and Disruption

Show how your product is different from everyone else’s. What problems is it answering? Is it innovative that it can go big (anywhere from $250 million to $1 billion in revenue)? Is your idea disruptive? Investors love ideas that ‘disrupt’ the status quo – will this idea create new markets for future investments? Does it answer the needs of a previously unrealized market? Does it fundamentally alter the way an existing market operates? All of these are questions a VC will be asking herself during an investment meeting, so you should as well. The more disruptive a product is, the more chance it has to have massive ROI for both the VC’s and for you.

Pitching an idea can be nerve racking, but it is important to remain confident in yourself and your idea, and that you know your pitch inside and out. Practice your pitch until you have it down, but avoid being wooden. Remember, VC’s are people too, capable of being inspired, excited, and intrigued by a good story. Don’t be afraid to give them one.

So if your business needs Venture Capital funding or incase you have a great app idea to share with us, we would love to hear it and hit the market. At SDI we turn ideas into profitable solutions again and again. Software Developers Inc is a top app development and marketing company based in the heart of Silicon Valley.