Funding is the lifeblood of every start-up.
Even the best idea in the world will not make it off the starting blocks without the financial backing to promote it to the right target audience and set up operations that allow you to scale quickly.
Raising money is daunting to even serial entrepreneurs. You’re pinning your entire professional reputation on one product; and should you fail to impress investors your idea may not even make it out of the blueprint phase.
When it comes to pitching, the hard and fast rule is make a connection. We know this sentiment is cliched (and vague in it’s endless possibilities), but we promise you can easily achieve this while still delivering a powerful, on point pitch.
If you want to connect with your prospective investors and knock your pitch out of the ballpark, follow these 5 simple steps.
Tell a story
Open with a problem and state how your product will solve it. To truly stand out avoid the dry sales spiel and frame this with a funny anecdote. The most compelling pitches tell a story – it’s the easiest way to connect with your prospective investors.
For example, if you’ve created a shopping list app highlight an instance where you forgot your partner's anniversary present and the ramifications of this. Trust us, NO ONE wants to be in this position. By opening with a common, everyday problem you’ll garner sympathy and immediately create affinity with your audience – better yet you’ve actually proposed a solution to the problem so they’ll never be caught out.
Johnny Georges’ Shark Tank pitch connected with investors’ hearts and minds, as it tapped into an honourable family legacy. He founded Tree T-PEE, a cone-shaped water conserving device that sits around the base of a tree. Turns out the product was inspired by his father who helped develop a rudimentary method of water conservation. After realising the benefits of this product the Sharks questioned why Georges insisted on such a low price point and wouldn’t raise the price; to which he responded he’s never done that because he’s about helping farmers and it should be affordable. His commitment to this cause, and to farmers, won over the sharks – securing him $US150,000 for 20% equity.
An idea is only as good as the people behind it. That is why you need to sell yourself AND your management team. Your first impression is critical, so don’t be afraid to highlight your professional history as this will build credibility.
Secondly the pitch and presentation should run like a well oiled machine. While you may want to show off the amazing team behind you, EVERY team member who is present needs to play a role within the pitch. Team members who don’t contribute will be seen as weak links and as such investors will target them with questions.
Only bring essential personnel along. Prepare them with research and get them to practise until they know the pitch inside and out. This way they’ll have the background knowledge to backup questions that are flung their way.
Keep it concise (& compelling)
Every word within your pitch must serve a purpose, so keep it to the point. To adequately prepare, you need to:
- Get your elevator pitch down pat. Your opening should be concise, engaging and facilitate an emotional connection. This is one of the most important parts of your pitch as this is where investors will decide if they want to hear more. Getting it right comes down to...yep you guessed it more practice.
- Build on your elevator pitch with a supplementary presentation. This provides the additional detail that supports the claims within your opening spiel. Forbes’ pitch presentation template covers the slides that you’ll need.
- Know your material inside out. Investors will often interrupt presentations halfway through to gauge how well you know the topic and to test how you perform under pressure. Plan out the key points you want to make within your presentation – then see where conversations and question time takes you.
- Remember: during all of this speak HUMAN not thesaurus. Avoid buzzwords for the sake of using buzzwords. This will keep things accessible, helping you build relationships with your potential investors.
Know your investor
This is an important one. To properly connect with your investors spend some time researching them before the pitch so you can tailor and prepare your content.
Look into their previous investments; both successful and unsuccessful. This will allow you to anticipate and address what they may be looking for, as well as any reservations they may have. Also look into their professional experience and whether they know your industry. If they do they’re going to have specialised questions so your answers will need to go into depth. On the flip side if they don’t you’ll need to spend more time explaining the industry - specifically outlining trends, financial data and competitors.
Include an exit strategy
No, we don’t mean you should disappear the pitch in a cloud of smoke (although that would definitely leave an impression). We’re talking about how you’ll exit your business. This is of huge relevance to an investor as this is where they make ROI.
To do this highlight exit case studies made by a similar companies, including what their respective payouts were. Then go a step further and actually propose a few companies who, potentially, would be interested in your idea. By pre-planning your exit strategy you show that you’re not just thinking of your means but your investors’ as well. Everybody loves a little bit of consideration!