How To Pitch Your Startup to Investors
Being an entrepreneur in today’s competitive industry is far more complicated than what meets the eye. Having a great startup idea is one thing, but getting it up and running is another. Getting the money to get your business off the ground can often be the toughest challenge for startups and this is where pitching your idea to potential investors comes into play.
This is an unnerving task in and of itself since investors are a lot more discerning now than ever before. Besides, the pressure of quickly telling someone about your business and making them intrigued enough to want to know more is not an easy task. This isn’t a natural skill many people possess and the job doesn’t get any easier particularly when you consider that yours is not the first and only pitch the investor is going to see.
Therefore, you need to put yourself in the shoes of the person who will be receiving your pitch. They are going to be very sharp about business, very well educated, and savvy about startups. However, they will not know the field of your startup as well as you do. Since they haven’t breathed the problem space as you have, the industry jargon might sometimes be new to them. You need to present your pitch like you would to a smart friend from a different field. Here’s how you need to pitch your startup to investors in a convincing way that will make them want to strike a deal with you.
Make A Strong Business Plan
The importance of a solid business plan cannot be emphasized enough; this is the best way to help you define the amount of money you need. It will also keep you grounded in your expectations and allow you to position your services and products more accurately. It’s very crucial to think long-term, as far as five to ten years down the line. If you don’t have a strong plan, no matter how ingenious your idea is, investors will not want to buy it.
Be Well Aware of Your Finances
Investors expect an elaborate level of detail. Your financial model should be presented as proof that your business has the potential to make good money. Be sure to calculate your projected costs, sales, profit margins, revenues, and acquisitions. When you’re pitching, you need to define your growth rates and these data will form the crux of your pitch.
Talk About Your Traction & Milestones
When you’ve started your pitch, you need to build your credibility from the get-go, so now is the time to share the relevant traction you have made. See this as your chance to blow your own trumpet, quite literally. You need to impress the investors with what you have been able to accomplish and where your business is headed. Lay out a roadmap of the next steps and milestones and remember that your financial predictions and revenue targets have to be tangible to convince investors.
Your Big Idea
Now is the time to define your business idea. Being an entrepreneur is all about thinking outside the box and you need to present it in a very convincing way. If your startup targets a big market and solves a genuine problem, then you’re an investor’s dream. Also, remember that humans are very much visual creatures. So, use this opportunity to not just tell investors about how great your business is, but show them. Create a compelling visual aid to support your pitch and make it interesting. The last thing you want to do is to bore your potential investor.
Discuss Your Products & Services
A common mistake a lot of startups make when pitching is getting too wrapped up in the idea of the business that they fail to convey the products or services their business provides. You need to show your product or service in the best light and talk about suppliers, quality control, and materials. Provide this information at the start of your pitch, but without lingering too much on the topic.
Talk About How You Plan on Attracting Customers
There is no point in having a great business idea if you don’t have a compelling plan of making your business desirable to the public. If your business doesn’t focus on customer acquisition, then it’s not going to make money and it wouldn’t appear as a profitable prospect for your investors. You should illustrate a strong marketing strategy for your business and sell it to your investors. You should mention how you intend to reach out to customers, the channels of advertising you will focus on, and how you expect to carry out your marketing campaigns.
Show Off Your Rockstar Team
Solo entrepreneurs often raise alarm bells because it takes more than one person to build a business. Investors always want to know that you have a rock-solid team behind you. Talk about your team, but at the same time, be open to also telling them about what skillsets you’re missing and how you want to incorporate the right talent into your business.
Manage Your Time Well
Time is money, so use it well. Condense your information to fit it into a specified time frame and make it brief, but comprehensive. Be confident in your presentation without rushing through it. A good idea is to rehearse and time yourself before presenting your pitch.
Share Unique Insights
Being a startup is a labor-intensive job that involves exhaustive research, sleepless nights, and hardcore dedication. You’ve most probably spent years navigating through every nook and cranny of a problem space, so allow this to come through in your pitch. Make it clear to your investors that you’ve already started the research aspect of this work. Remember that while investors are undoubtedly smart, they may not be experts in your space. Your pitch should offer a lot of unique insights and leave your investors impressed with your journey.
Know Your Investor
Do background checks on your investors, including the startups they have invested in, what their core values are, and how their investment journey started. Gauging such information will allow you to see if there is a pattern and anything specific that will make them say yes. Be sure to also talk with others in the startup ecosystem about the types of questions they will ask so you can prepare yourself accordingly.
In conclusion, it’s important to remember that there is no universal pitch template that works for all startups. However, some key narrative beats can allow you to encapsulate the essence of your startup business and your own unique story in a way that will persuade investors to see it through to the end. Be brave enough to show some panache and creativity to make your pitch memorable and incorporate some emotional aspects as well – this will help set your pitch apart from the rest.