A majority of budding entrepreneurs are optimistic, enthusiastic and passionate about their products or services. Unfortunately, investors may not share the same opinion about your “excellent” idea that is designed to change the world.

So, the process of preparing for investor meetings and raising funds to get your startup idea off the ground can be a challenging undertaking. Here are six things you need to do before you connect with potential investors.

1- Do Your Research

Since there are many potential angel investors or venture capitalists, you need to do your homework extensively and investigate each of your prospects. Before you close any deal or sign any documents, gather credible leads, sort them out carefully and do your due diligence.

For instance, if you‘re looking for an investor in the field of technology, you should target investors in tech-related areas. Working with an established investor in the technology industry, such as Mark Stevens, who is the current managing partner of S-Cubed Capital, is a great way to get started.

Don’t just contact any venture capitalist out there blindly, and expect to get funding. Instead, you should apply some level of business-development mentality so that the potential investors you contact can consider your idea. An ideal investor should be an individual who has both the financial power and technical knowledge in your product area and vertical markets.

If you manage to convince one investor to invest in your product, there is a possibility that he/she may persuade others to consider making the same move. Angel’s List is a great platform to find potential investors. However, before you call or meet with any investor, scour the internet lengthily and read everything you can about the investor.

2- Plan Strategically

There is a strategic planning process that you should follow when trying to raise capital for your startup. Some of the key components you should consider observing in your business plan include:

• Customer profile
• Product roadmap
• Target market
• Value proposition
• Competitive landscape
• Future projections
• Key milestones
• Operating expenses
• Customer acquisition costs

Once you understand these basics of your startup idea, it’s much easier to raise outside money from venture capitalists.

3- Come Up With a Credible Business Plan

Coming up with a credible business plan is part and parcel of your strategic-planning process. Your business plan should forecast your quarterly financial model at least for the upcoming three years.

In order to truly understand your business’s potential and how to describe it to potential investors, you need to get a detailed monthly financial plan for at least the first 18 months. Getting your product right involves being able to explain it crisply and clearly in terms of the money-making strategies that you have in mind.

4- Come Up With Key Milestones

Although your startup idea may be stimulating, investors are often more interested in the mind behind the concept. Investors will only give you their money if they’re confident in your ability to deliver results.

Therefore, you must be able to identify measurable goals so that potential investors can be convinced that you have the skills to realize the big plans. After all, without a clear set of key milestones and objectives, it’s impossible to argue your case before any credible investor.

The entire process of raising capital for your startup is likely to take up to six months. Hence, you should form near-term key milestones that you intend to achieve within the next few months. The small wins will encourage your investors to get involved in your business.

In terms of reducing risks, each of your milestones should be relevant and realistic. You should know what your real milestones are and how to track your progress.

5- Describe the Problem Your Business Solves

Regardless of how amazing your startup business idea is, it must be able to effectively solve a particular problem that your target audience is struggling with. Describing the exact problems that your business idea hopes to solve, is a highly effective strategy, especially for budding entrepreneurs in the tech industry. It would help if you found a way of showing your potential investors something tangible within the first five minutes.

6- Create a Convincing Pitch Deck And Presentation

You need to come up with convincing pitch decks and investor presentations when meeting with potential investors. A pitch deck describes the imagery and text on your presentation slides. Your performance, on the other hand, is what you’ll say and how you’ll say it.

Your pitch deck should clearly describe all the aspects of your business idea and highlight the financial plans you have about spending and making money. Therefore, you need to thoroughly scrutinize and develop your business model and visualize it in your pitch.

Having a solid, realistic and achievable business plan is a sure-fire way of getting funding for launching and running a startup. When relying on investors to help you get started and make any meaningful growth, you must be tactical in your pitches. While there are several ways of raising capital for your startup, you need to evaluate your business projections to avoid making mistakes that may derail your growth potential or business objectives.