How to Successfully Pitch Your Startup
You're standing in an elevator packed with Venture Capitalists, and you've got just a couple of minutes to convince them that your startup is the next big thing. Oops!
As a startup, you're the underdog. You have the best product out there, but no one knows about you. You have incredible ideas and technology, yet you’re not backed up by a major corporation. Presenting an outstanding pitch is your key to unveiling your brand and attracting potential investors.
Don't worry about it! I'll help you craft the perfect pitch; all you have to do is show up and hit a home run. Not sure what to include in your pitch? Here’s a useful checklist to make sure you don't miss anything important:
Who are you? What makes you think this business is a good fit for you? Why should they trust you? Don't be afraid to gloat a little about your expertise, but most importantly make it clear how this venture relates to your previous experiences.
What does your startup do? Describe how your product or service addresses the problem in question. Keep it simple, and use real examples to help investors imagine it in action.
Why does your startup matter? What impact will your startup have on society? Why should they care? Avoid lengthy explanations; instead, focus on the most important aspects.
“Investors are not solely evaluating your company’s story, they are also evaluating your ability to convey that story.”
Top tips for delivering a stellar pitch:
One of the most daunting tasks of being an entrepreneur is pitching to investors. That’s a fact whether you’re raising your first angel round or you’re a seasoned pro looking for series A funding. With so much at stake, it's critical that founders nail their investment pitch.
A detailed business plan is the foundation for a successful pitch. Then it’s up to you to figure out what makes your business valuable and worth investing in. When you’re pitching to angel investors and venture capitalists for the first time, you’ll often only have around 10 minutes to make your case.
Here’s a list of tips to help you plan, prepare, and deliver the perfect pitch.
First and foremost: be confident! Own the fact that you've taken this great step toward making your idea a reality, and that you're the only one who can achieve it. It takes guts to pitch an idea to other people when there are so many risks involved, so be proud of yourself for taking those risks.
Find the right investor: You could be the next unicorn, but if your business idea doesn’t resonate with the person you’re pitching to, they won’t write you a check. How do you make sure you’re pitching to the right investor? Easy. Before scheduling the meeting or deciding to reach out, do your due diligence. Investigate and learn everything you can about a potential investor, including their background, career, interests, network, availability, and temperament.
Create a pitch deck: Start by creating a compelling elevator pitch. Keep it short! You want to give investors enough information to pique their interest while leaving them wanting to learn more. The best way to do this is by creating a 10 to 15 slide pitch deck that is light on text, and incorporating graphics (charts and graphs) that help you present complex data in a simple and engaging manner. Here’s a pitch deck template that could help you kick off.
Practice your pitch: Practice makes perfect. The more you rehearse your pitch before the big day, the more comfortable you'll be when the time comes. If possible, find some friends and ask them for feedback on your delivery. Make sure you understand who will be listening to your pitch and what they're looking for, then tailor it to resonate with these potential investors.
Outline the problem with a story: Rather than approaching the opportunity as a sales pitch, use the occasion to tell your investors the story behind your business. This type of storytelling will make your pitch much more memorable and engaging to your audience; if your investor needs hard data, they can always ask you for it.
Showcase your solution: Don’t lose focus as you tell your story. Respecting your investors’ valuable time should always be at the forefront of your mind. To avoid getting lost in irrelevant topics, make sure that your pitch’s core elements are clearly developed and emphasized when developing it.
Showcase your product: One of the most important aspects of attracting investors is demonstrating how your product or service differs from others on the market. It’s not enough that your startup can address a problem; it needs to solve a specific problem in a way that no other business can, and you need to demonstrate that in your pitch. Allowing investors to see and experience your product firsthand is another excellent technique to demonstrate its unique qualities. Images or photos of your product might help investors visualize it, but if at all feasible, allowing your audience to handle it or check out a live demo can boost your impact.
Identify your target market: Whether your startup focuses on a product or a service, one thing’s for sure; if you want to make money, you need a target audience. As much as investors want to know what your product is, they also need to understand who will be using it. Showcase relevant information about your target market to paint a picture of your ideal customer; that’ll help convince investors that there’s enough of a demand for your product to justify their involvement.
Explain your revenue or business model: How will you make money? That’s usually what Investors care about the most. Be very specific about your product’s pricing scheme, and emphasize again how your market is eagerly awaiting your arrival.
Showcase your milestones: This is your opportunity to shine. Impress the investors with what you and your team have accomplished to date with a full snapshot of your business; sales, contracts, key hires, product launches, and so on. Don't just talk about what you've done; talk about where you're going. Show them a roadmap of your next steps and upcoming milestones, and mention how funding will help achieve them.
Elaborate on your marketing & sales strategy: How will you reach your customers? How much will it cost? How will you measure success? Your financials should allow you to calculate your customer acquisition costs easily. However, you should also indicate how you intend to reach out to customers, which channels you’ll be advertising on, and perhaps show a sample of messaging.
Introduce your team: Entrepreneurs often pitch with a few of their key people present. While many entrepreneurs briefly introduce their team, it’s important to go a step further and offer a quick, impressive insight into what each member offers the business.
Show your financial projections: How much money does your startup need to raise? What is your current overhead? When will your break-even point be reached? In telling your startup’s story, you will still need to mention key figures that investors are interested in, and what your timeline for achieving profitability is. Make sure your presentation showcases a few critical figures, demonstrating that you recognize what’s relevant for your business and its industry.
Explain what differentiates you from your competition: Many entrepreneurs don’t provide enough information about why they’re so different from their competitors. The best way to communicate your value proposition is through a competitive matrix format. List your competitors down the left side of the page, your company’s features across the top, and use checkmarks to pinpoint which company offers each feature. Ideally, your startup has checkmarks across the top for every category, and your competitors lack in key areas clearly showing your competitive advantage.
Explain your funding needs: Success is having a funder decide to invest in exchange for equity in your company. This is not the time to be close-fisted; by doubling your request, you can cover unforeseen costs without having to go back to investors and ask for additional funding. This often results with entrepreneurs giving up more of their company to launch the business.
Show your exit strategy: Are you planning on getting acquired or going public? Most investors will want to know your exit strategy if you're seeking substantial amounts of investment funding (above $1 million). Show them the work you’ve done on this exit strategy, including the companies you’re targeting, and why that would make sense in three, five, or ten years.
Make sure you have a strong close: Remember to keep the end in mind as you are telling your startup’s story. A brief, clear summary of your argument as to why investors should put their money in your startup is a strong close. As you work on your pitch’s momentum, don’t to get stuck rushing through the end; that’s when a key opportunity to bring all the elements of your pitch together presents itself.
Prepare for a Q&A: Your investors will have questions no matter how flawless your pitch is. Anticipating those questions and having clear answers will not only boost your credibility, but will also allow you to address concerns before leaving the boardroom. How can you anticipate? Think about your pitch presentation:
Did you overlook details that are important to understanding the viability of your business?
Is there anything you mentioned during your presentation that may need more clarification?
Scribble those down and figure out how you can fill in the blanks. Also, look at your pitch from your investor’s point of view:
Are there concerns they may have about your market?
Are they likely to have any issues with your business model?
Will they have questions about your product?
Make a list of probable questions or concerns and work out how to best respond to them.
Gather feedback & refine your pitch: Look for ways to improve your pitch, regardless of the outcome. Don’t be hesitant to ask for feedback and take that into account next time. If the investor isn’t willing to provide any, don’t press the issue; after all, it’s their time you’ve just spent. Look for flaws, areas you stumbled over, and slides that elicited negative responses from the investor. Even if you think you've found the perfect pitch, keep refining, practicing, and executing it.
Conclusion:
This is what you'll use when you encounter a powerful person and they ask you about your business. The duration will depend on the number of people listening, and whether or not they're tired of hearing pitches for the day. Consider asking the host how much time each pitch is generally assigned.
Always keep in mind that any claims you make in your presentation regarding your target market, financial projections, marketing strategy, or anything else, need to be backed up with evidence. Being unable to do so will undermine your attempt to convince investors that you understand your business, and that you’ll be able to provide them with a return on their investment.
You’ll really never know how good your pitch is until you give it a shot. Don’t overthink it, and embrace every investor pitch as a learning opportunity for you and your business. You'll only get better as time goes on, and you'll be able to apply what you've learned to every aspect of your business.
