Pitching your startup to investors can be daunting. You have to successfully match your business idea to the right investors for it, and then pitch it in a way that those investors will want to work with you. This endeavor requires that you do some research, narrow down your choices, and then make the best pitch you can.
To help you with making a successful pitch, we have put together some useful tips for you to consider.
Do Your Homework
It’s a real possibility that some of your competitors will pitch similar business to the same investors that you do. That means that you have to raise the investors’ confidence in your business. To do that, you have to show your expertise regarding the numbers, your competitors, your budget, and everything else. Do your homework, be prepared, and know what you are talking about before you meet with investors. That will indicate that you are knowledgeable and instill the confidence in investors that will help you win the deal.
Make Your Pitch Short and Sweet
Timing is everything, so keep the pitch short and sweet. If your idea has merit, you should be able to pitch it in ten minutes. The more concise, yet informative you can be, the better. You want to pique the investors’ interest so that they will ask a lot of questions when your pitch is over.
Tell Your Story
Telling a relatable story about your startup is essential to reeling in investors.
“It doesn’t matter that you think your idea is the next big thing. If your pitch is dull, unattractive, with only dry details, you’ll fail to catch the investor’s attention. He’ll lose focus. Before you know it, another one’s lost.” – 5 Tips for Pitching Your Startup to Investors, VentureBeat.com
You’re keeping your pitch brief, but that doesn’t mean that you can’t be specific. Be sure that your pitch includes these four crucial points:
- Exactly what your product is.
- Exactly what makes your product unique.
- Exactly who your target demographic is.
- Exactly how you plan to acquire those customers.
Discuss Your Revenue Model
Investors back businesses that are going to give them a good return on their investment. Make sure that you are able to tell investors how your startup will make them money. That means that you have to have a revenue model that will work, and you have to be able to convey that model and how you plan to apply it to your potential investors.
Have the Right Attitude
How you present yourself to investors is vital. You want to exude confidence without seeming arrogant. It’s a fine line, but confidence is appealing and it shows that you believe in your company, arrogance can be a deal-breaker that tells investors that you are uncoachable. Be sure to have your attitude in check before you begin your pitch.
If you have ever watched the television show Shark Tank, you know that wild enthusiasm is often what sets winners apart from losers. So when you make your pitch, you have to show genuine passion for your product. But you have to do it in a way that doesn’t take away from your insight, integrity, and realism.
Gain Confidence Through Practice
Perfecting your pitch takes practice, and that practice will increase your confidence – an appealing trait for investors. John Boitnott, Inc.com columnist, offers this advice for perfecting your pitch. “Don’t be too aggressive or too aloof. Nobody wants someone who is too desperate or too uninterested. Strike a balance. If you don’t appear to be interested in what an investor has to offer, why would they want to give you money? Finding this balance takes practice of course, so if possible, give your earlier pitches to less distinguished backers whose investment isn’t crucial. Try to work your way up slowly to more esteemed, powerful investors so you have time to improve and make mistakes with your pitch.”
Provide an Exit
An investor’s goal is to make a lot of money in a short period of time. That means that they have to be able to see an exit strategy before they even decide to throw their money into your startup. Answering the question, “How will investing in your startup make me a lot of money in five years?” before the investor asks it, is an often overlooked component in pitches. Be sure to include the answer in your pitch – showing the investor that a big payoff is coming – before they have to ask.
The way you pitch your startup is crucial to getting the backing that you need from investors. Have a small business CRM to help you gather metrics you need. Finally knowledge and enthusiasm are important, but how you demonstrate those attributes is what is going to make it successful.