So, you want to start your own business but need a hand from someone who already has experience. Someone who can financially back your company and mentor you? Pitching to investors maybe the key to your success.
Having a well prepared, organized, and short pitch deck is important to attract investors. An investor’s time is valuable which means five minutes or less is an ideal pitch length. The main goal is to let them know what your business is about, why it is important, the target market, and why they should invest. However, just the numbers can disengage an investor. You have to engage them and tell them stories. Intrigue them. Make them love your company and your idea.
Five minutes doesn’t seem like it would be enough time to do everything. It doesn’t even seem like enough time to get the basics out. We assure you it is possible. The key is to be precise, concise and go straight to the point. They don´t need to know everything. There really is only one thing an investor needs to know, why they should invest in you and your idea.
We put together some basics to help you create a pitch to investors
Introduce yourself and your business
Let them know what your business is about. What is your industry? If they are already familiar with it, then make it quick and provide necessary information only.
Word choice is important. Be concise and clear. Sometimes, simpler words are better to express your idea.
E.G. Use the word “use” instead of “utilize”. They actually mean different things and “utilize” does not make you sound better informed.
Tell them an exciting story about your startup, everyone loves to hear stories! Inspire them!
E.G. Tell them your origin story. Stories are exciting and inspiring. How did you become Bill Gates to the organic food movement? Tell them who you are and why you are in this business.
At the beginning, you will not have data that applies specifically to your business or product. You haven’t started yet. You will have general market data, possibly statistics on comparable products. Investors understand, “At this point, they’re investing in you and your team,” explains Sheeva Sairafi, the founder and CEO of “Local and Lejos” said in an interview with Ivanka Trump’s blog. Show them that you and your team have the necessary skills, experience and passion to execute your startup.
“Angel investors invest first in the entrepreneur not in the business plan. It’s important that the investor and entrepreneur can get along. They will want to see that you are fast, thoughtful and efficient, and can sustain the project through its conception and growth” says Baybars Altuntas in an interview with Forbes magazine, a successful entrepreneur and Ambassador of the World Entrepreneurship Forum, a global think tank dedicated to entrepreneurship.
Know your product/service
This is one of the most important points. At the end of the day, you want investors to provide you financial support because your idea is good.
Let them know what problem your target customers are facing and how your business will solve it. They need to know why you offer a better solution than those already on the market. Give them a balanced account; let them know the pros and cons. Prove why your idea deserves funding.
In order to do this well, you need to know your market well. This means knowing your customers and competitors. It might be a good idea to put together a “buyer persona”. This is a communications and marketing tool to help you better communicate with your target audience. By creating one for your pitch deck it can help you deepen your market knowledge.
Make a business canvas
There are many good reasons to create a business canvas. It keeps you on track and it helps set goals. In this context, it shows investors you are capable.
Some key points to include in your pitch:
Check out how to create a nice Canvas Model https://canvanizer.com. Creating visually appealing and informative documents show that you are prepared and informed. Give your prospective investor a copy at the end of the meeting. They can read the details later and have a reference for decision-making.
Investors need to know what will happen if your venture doesn’t work out. Or what will happen if your venture is wildly successful. The first one is obvious, they want to protect their investment. However, the second businesses have failed before with rapid expansion and no way to handle unexpected growth.
Think about questions may arise and have answers prepared. Practice A LOT. Not just the answers to questions but your entire presentation. Practice until you feel natural delivering it in your sleep. Remember that first impressions are powerful, prepare yourself for show-time!
When Christine Chang and Sarah Lee pitched their Korean beauty company, “Glow Recipe”, on Shark Tank, they found that the key to success was practice. “We were confident that we knew the ins and outs of our business better than anyone, but it came down to succinct and compelling delivery,” says Christine in an interview with Ivanka Trump’s blog.