How To Pitch To Investors: 10 Tips To Get You Started
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Congratulations, you’ve got yourself connected with some investors and you’re ready to pitch your next million dollar idea to acquire some funding.
This can be a nerve wrecking scenario. Everything you’ve been working so hard to achieve rests on this moment to acquire financial backing or see your work stand idle. In moments like these, you can’t leave anything to chance.
That’s why we’ve put together this article that goes over not only how to pitch to investors, but how to pitch successfully.
How do we know you’ll be successful?
With years of presentation feedback. If you follow this guide on putting together a great investment pitch presentation, you’ll cut years of trial and errors thanks to us compiling our years of experience into this article. We’ll save you the trouble of experimenting, allowing you to cut the time in half and going straight for a final product that works.
Preparing To Pitch Investors
Before you go and pitch your business idea to investors, there are a few things you should do beforehand such as developing a pitch deck, working on your elevator pitch and a bunch of other due diligence tasks you should complete in order to have a successful pitch.
You should also be doing your homework.
Crafting a proper pitch requires you to do your homework on who you will be presenting to. Will you be presenting to an investment company with multiple directors? Will you be pitching to individuals? Maybe you’re one of the lucky entrepreneurs who has secured themselves a spot on Shark Tank!
Whatever the case may be, in order to pitch like a pro, you need to be prepared and know who you’re pitching to.
How To Pitch Venture Capitalists
Venture capitalists, or VCs for short, are institutional investors in partnership. They will often be investing large sums of money; often a million dollars or more and they will likely want operational voting power.
VCs are typically more thorough in their research and will require you to be very detailed in your pitch meeting in order to secure funding. VCs are writing checks on behalf of a group of investors so they are in a precarious situation to make the right decision. You’ll find that you will begin to be asked tough questions. Don’t take this personally as VCs have a lot of trust to uphold with their investors.
They don’t invest on a hunch or emotions. They invest based on metrics.
That’s why in your pitch deck, consider including visual presentation aids such as graphs and tables. Don’t hold back on data. Try and share as many metrics as possible.
How To Pitch Angel Investors
Angel investors are individuals with a high net worth. This means they often represent themselves and are usually business savvy.
They’ll often be quicker to act and may be persuaded more by emotions or hunches.
When pitching to angel investors, this is a time where you can have your presentation be driven more by a story rather than numbers.
Preparing The Right Amount Of Time
Preparing the right amount of time for your pitch is critical. Many investors take meetings in time slots. You’ll be given anywhere between 5 minutes to a full hour. Depending on what slot you’ve been given, you have to prepare a presentation which effectively optimizes the use of the time you’ve been given.
A 5 minute elevator pitch is going to be a lot different than an hour presentation covering your business strategy, market data and financial projections.
Do Your Research On Each Investor
Not every investor is interested in the same information. As great as it might be to have a generic presentation you can essentially use as a template for each pitch with some minor adjustments, this isn’t the case.
Do your research ahead of time and try to get the answers to the following questions:
Who have they invested in before?
What is their past business experience?
What makes them say yes or no?
What questions might they ask you?
What experience might they have that you want to leverage the most?
By answering these questions ahead of time, you can not only prepare for what they might ask and have an answer, you can be proactive and answer these potential questions during your pitch. Researching internet statistics about the company you’re pitching can be one of the best ways to show you are prepared and knowledgable.
What To Cover In Your Investor Pitch
Now that we understand the preliminary work that goes into a pitch, let’s begin to discuss what you need to cover while pitching to investors.
1 - Start With Your Hook
As great as it might be to have scheduled an hour for a pitch, the reality is, things change. If your presentation time slot was canceled and you had one last opportunity to get your idea across, what would you say in that window of 30 seconds?
Whatever comes to mind, that is the hook of your presentation.
Just like a novel, your pitch needs a hook to keep the audience engaged. Without a hook, you can lose your audience’s attention as quickly as a minute.
2 - Tell An Engaging Story
Did you get through the first 30 seconds and your potential investors are still engaged? great!
But we’re not done yet.
Now you need to tell an engaging story. Note, if you’re pitching to angel investors, you might want to put more weight on the story narrative of your pitch. If you’re pitching to VCs, don’t focus too much on the story. Be more analytical.
Most founders find this portion of the pitch easy as they’re so emotionally invested in their business that the words start flowing naturally. If you struggle with crafting a compelling story, think to yourself, “What is the problem I noticed in the marketplace and why did I decide to create a solution to the problem?”
If you’re able to answer these questions, you’ll have a great foundation for a story.
3 - Be Clear On What You're Seeking
You’re pitching to investors to gain something. What is it?
Are you looking to gain funding, a partnership or completely sell your business model? Whatever it is, be clear.
You should typically mention what you’re looking for within the first 2 minutes of your pitch. This will help frame the value proposition in the minds of the investors.
4 - Be Bold & Big On Business Potential
Being modest and humble has a place and a time. An investment pitch is not one of them.
You want to be big and bold with your business’s potential market opportunity. If you expect to be the next Google, don’t be shy. Say it.
But, if you do make bold claims, remember the following. Don’t lie and provide proof.
If you lie, you’ll lose the trust of your investors and you can get into some serious trouble.
If you don’t provide proof, then your words mean nothing.
5 - Describe The Competitive Landscape
The perfect pitch is one where the investor buys in right away. The only way to get investors to buy in is by providing as much information as possible.
This is why you should describe the competitive landscape.
As great as it would be for an investor to know everything about every business and the marketplace, they can’t. Help reduce the cognitive load and additional research the investor needs to do by describing the competitive landscape.
6 - Discuss Your Business Model & How You're Different
One of the factors that scare off investors is entering a marketplace which is already over saturated.
There are many entrepreneurs looking to escape the rat race and with many ideas being formulated on a regular basis, you need to be able to identify and articulate how your idea is different from all the others in the total addressable market.
7 - Outline Your Marketing Strategy
Once you’ve secured funding, an investor is going to ask, “What’s the next move?”
This is where your marketing strategy comes into play. Although it may seem premature to ask, an investor wants to analyze any potential risks they might encounter or you.
In explaining your marketing strategy, you should identify your overall target audience or target customer.
8 - Describe Your Revenue Model
Money makes the world go around and it also is what investors care about. How are they going to make more money from the money they already have?
This is where you describe your revenue model.
How will your product or service start generating an income?
The digital age we live in has brought forth new revenue models never seen before. Uber, AirBnb, and DoorDash are all examples of new revenue models where the company itself doesn’t own any real estate, cars or restaurants. They are software companies first making their money by providing a platform to facilitate the use of other, traditional industries.
9 - Introduce Your Team
Teamwork makes the dream work.
If you have a stellar team behind you backing your project, you should include them in your pitch presentation. As you may be a small business or a start-up with a small team, include the following for each team member. Their past history, education and key points as to why they should be mentioned.
You might want to consider mentioning other investors as well, especially if you had a high-profile angel investor invest in the pre-seed series and now you’re looking for additional funding from a VC.
10 - Provide A Demo
If you can, provide a demonstration.
One of the best tips for pitching we have is to demonstrate what you have. Demonstrating helps answer questions investors might have by them simply engaging in whatever product or service you’re offering.
11 - Explain Your Exit Strategy
Every good business plan has an exit strategy because no one wants to be working forever.
This strategy explains how the investor will get their money back.
Whether it’s going public on the stock market or hoping to sell your business to a larger, industry dominant giant, include what you plan to do down the line and how long it will take to get there.
Conclusion On How To Pitch To Investors
Like we mentioned from the beginning, if you follow these steps, we are confident you’ll be able to present and deliver outstanding pitch presentations to find the ideal investor.
To make it easier, you might want to consider outsourcing your presentation to a presentation design company like Presentation Geeks. Presentation Geeks offer full-service design services for presentations. Whether you’re pitching to investors, clients or presenting at your company’s quarterly meeting, the team at Presentation Geeks can help.
Otherwise, we wish you the best of luck and happy pitching!