Your funding Pitch – The Preparation Phase
Before approaching the investment community you should prepare a sound funding pitch. Recruitment Investors are smart, business savvy people and in many cases you are asking them for their own money. You would not approach a bank for a mortgage unless you knew you could prove your income, and yet a business investment is often much less guaranteed. Therefore it is important to build a solid picture of credibility, give your investor something tangible to invest in and have solid “look you in the eye” answers to all the difficult questions. Do not underestimate the amount of time and effort this takes. Investors will not entertain a meeting without first viewing a business plan.
If you approach the investment community without the proper preparation your funding pitch will be turned down and you churn through precious contacts, wasting opportunities and time.
Your Business Plan is your recruitment startup’s compass
All new businesses should follow a sound business plan dictated by your financial projections. Without this your business lacks direction and leadership and you will ultimately waste time. Time spent preparing your business plan is time well spent to give your business a “road map” and an agreed plan to work to.
The polished recruitment business plan
Write your business plan from your investor’s perspective and viewpoint. Demonstrate your company’s value proposition to entice your investor. Use winning headlines to captivate their interest.
Business Credibility is The X Factor: Increase your chances exponentially
• Recruitment investors have heard every pitch on the planet, every angle and every sweeping statement, dream and ambition out there. They are sceptical, so layer on your credibility by adding facts, figures, measurable statistics, references, testimonials and case studies wherever possible. Your financial projections must be based on solid market research.
Your investor will want to investigate you, conduct due diligence and want to establish as many credible reference points about your business as possible. Do you stand ready and confident for your interrogation?
Address your skills gaps
Your investor will want to be convinced that you have all the skills required to run your business, so be sure to analyse and address your skills gaps. Partnering with the recruitment support experts is a good idea and will demonstrate that you will have a greater chance of success.
Research & Preparation
- Research your business plan, sales and marketing plan, company financials and personal profiles
- Work to a business “to do” list to build a legally strong business and give your investor something tangible and credible to invest in
- Identify your weak spots to be prepared for challenging questions
- Layer on credibility, build confidence in your recruitment investor’s minds, wherever possible, use tangible reference points
Optimise your recruitment business plan
Condense and simplify your message, with simple graphics and layouts for super busy investors who look for a quick “elevator pitch”. This means that busy VCs can clearly understand how your business processes works.
- Present your company financials in a standard 3 year format
- This format will instantly show your investor your above the line costs and below the line costs
- UK taxes are reflected in this format at the current rates
- Your investor will also be able to “test” your figures, price points etc to establish a viable “breakeven”
The recruitment funding pitch
- Ensure that, you achieve a usable “pitch stack” to be presented to recruitment investors
- Design a targeted marketing plan to reach and engage the right investors
- Execute a recruitment VC funding pitch campaign as detailed below
Funding Pitch – Work hard to build connections in the recruitment investment community.
Target: High Net Worth Individuals, Private Equity, Finance Houses, Venture Angels & Venture Capital
- Write your introduction e-mail copy
- Prepare your CV and personal profile
- Perform introductions to recruitment investors
Your recruitment funding pitch
Your recruitment investor is considering you and your personality as much as all other factors in the investment equation. So always aim to obtain a face to face meeting with your investor. It will be you who attends your proposal meeting, pitches to your investor, and you who must sell your idea and close them for funding. They must be blown away by your enthusiasm, but also convinced that you have what it takes to work hard for success.
Avoid short cut spam tactics by mass mailing your recruitment investment pitch, use Linkedin to network steadily and make direct approaches that will build rapport.
Rhys sold out of his previous recruitment businesses in 2012 to focus solely on helping recruiters set up and build recruitment businesses. Follow Rhys on LinkedIn or contact him direct for help with your start-up recruitment business or for coaching to grow an existing one.