It is challenging because the stakes are high and the competition is so strong. If you are finding it hard to believe, attend just one startup pitch competition and watch founders sweat their nerves off.
To make the most of your pitch, you should be able to impress the investors and stand out from the crowd while you still manage to keep your authenticity. Look through some of these tried and tested tactics and watch investors give you that coveted phone call/email.
Have a casual opening conversation
Investors invest in people, not just ideas. Beginning with a casual conversation engages them person-to-person, instead of presenter-to-presentee. That connection can be very persuasive.
There are many casual conversation openers, like bringing up a mutual connection, but the key is to give the best, most authentic impression of yourself. Most investors come to pitches with questions about your charisma and character, two things you can impress early on with some quick conversation. However, don’t let the conversation prattle on. Keep it to a few minutes tops, and then get into the meat of your pitch.
Start things off with a succinct tagline
Get to your pitch’s core by introducing your company with a tagline and short explanation. Right out of the gate, you want investors to know what they’re looking at and why they should care.
A good tagline should be seven words max, and should hint at your company’s vision in a memorable way. Following your tagline, you need to explain what your company does. Do this in less than five seconds, in very simple language.
For example, “We make Printing suck less for Nigerians” is a good, straight-forward explanation of your service.
“We drive synergistic, automated, and digital production of visual creations and products using a 360-degree platform easily accessed and usable by the underserved population of Nigeria” is a mess.
The last thing you want is to ask a VC to waste mental energy figuring out your convoluted explanation.
Keep it simple
As clichéd as it sounds, a short and simple pitch of up to 10 minutes is a great tactic. Stop yourself from using long monotonous pitches spread across numerous PowerPoint slides doused in numbers and data.
Tell your story, like a story – mention your beginning, your plot (the product and the plan), the revenue and future plan in a manner that even a ten-year-old could comprehend.
Connect with the heart
All good pitches locate the emotional centre of the subject and go in for the kill. Pitching is about understanding what the investors are most interested in and developing a conversation that arouses the soul. Tell a story that’s relatable, inspirational and addresses the marketplace problem you’re solving. Let them see every ounce of the passion that drives you.
Your passion will differentiate you in their minds because it’s an admirable character trait that shows promise. It makes a statement that you’re going to make your dreams happen with or without their help, and that will make them want to be a part of your success story.
Connect with the head
Telling an inspiring story is all well and good but if your idea is still riddled with loopholes, your pitch will count for zilch. Your startup needs to be firmly planted in reality and you have to prove very quickly that you know your stuff, or the investors will stop listening.
You may engage fun, attention-grabbing tactics but that just makes them pay attention to you. When you do have that attention, they will be paying close attention to everything you’re saying.
Your unique value proposition, business model, your competition, customer acquisition strategy, sales distribution strategy and so on are the questions they will be looking to have answered. If you fail to answer them, they’ll be striking your name off their list like a bad habit.
Show that you know exactly how to build a company around the product or service you’re pitching.
Show that you understand the competition
Many entrepreneurs believe that if they highlight how unique their idea is by pointing out that they have no competition, they will impress the investors and win their attention. Nothing sinks a pitch faster.
This is a gross misconception. Even if you don’t know, your potential investors probably already do. They are aware that people are currently solving that same problem in other diverse ways. Those are your competitors, believe it or not.
By knowing your competition, you prove how well-informed you are about the niche and show that you know how to position yourself in the market.
Show them the money!
Let’s face it – investors are not as interested in your product as they are in making money. Go with a clear revenue model and tell the investors how you can make them richer. Having a timeline is even better – investors would love to know how much money you can make for them in the next 5 years.
Don’t mimic a spreadsheet
One of the biggest mistakes newbies usually make is incorporating too many data and statistics in their pitch deck. You want to include the market size and analysis, but don’t spend too much time on it.
It’s more important that you convey a value-oriented, compelling and memorable message, so be precise and simple. Ditch your 30-slide PowerPoint; for 10 to 12 slides instead and make each slide count. A simpler idea is easier to understand and buy into.
Have a great team dynamic
A bad partnership can ruin a business. Investors know this so they stay on the lookout for your management team. Your partners and the team dynamic should help inspire confidence, not raise questions. If investors sense any friction, they’ll run for the hills. If you have an experienced, seamless team, their fears will be assuaged.
Leave investors wanting more
You need a strong conclusion. But perhaps a more powerful closer would be telling investors about your exit strategy – how they’ll get their money back. This is because, they could love your idea, but if they don’t think they’ll make money off of it, they’ll look elsewhere for investment opportunities.
Investors are not going to be associated with your company forever. They want to invest, make money and leave. Deliver an exit strategy to tell them what they would gain at the end of your relationship. Investors love to know what returns they are going to get if they invest in you and how your company would look like when they leave.
Feature image from Spikelab.org