What you should know about pitching to investors
Ones you have your idea, your team, your product, your plan, you are prepared for pitching!
To go from the idea to its realization and take the first step on putting your business out in the market you need to get financed. What should you do? Find a way to get in contact with potential investors and pitch, pitch, pitch!
You can find business investors online, since the majority of the business angels like to be anonymous, however the best impressions are made in person.
This century is the era of conferences and networking events where you can find people from different backgrounds, with different experiences, some of them angel investors that would like to invest in innovative products and ideas.
When you get an opportunity, follow this several tips to present your idea and convince the investor so they cannot turn your offer down:
1. Timing is crucial — the less time you take, the better. The more concise you can be, the more effective you will be. The key is to have a well-crafted pitch that takes ideally no longer than a minute to deliver in an unhurried, but practiced manner. Any longer and the potential investor will most likely have moved on either physically or mentally.
Professional investors, such as venture capitalists and serious angel investors do not have long attention spans. They need to consider, evaluate and choose among so many startup investment proposals that only if they are interested in your idea they will keep listening to your proposal and ask questions.
That is why it is important to have your pitch practiced, so you can include all the relevant informations in under a minute for your quick elevator pitch.
2. Don’t spend the time on numbers, tell a story — turning your business idea into a story and adding that empathic side of your business is a promising way to keep the investor’s attention. Everyone loves a good story, even the most data-driven investor.
Open your pitch by telling a real customer story that addresses the problem your product or service solves in the marketplace. Keep it simple and realistic. At the end, what people will remember after they walk away from you are the stories you tell, so it’s important to have a few compelling customer stories ready to share.
3. Be clear and precise — because time is important, you need to develop an absolute focus on the core components of your pitch.
Present the most important parts of your business idea, don’t go into details, tell the investor what he wants to hear and go straight to the point. Explain exactly what your product or service is about but also what is unique about it. Who is your target audience as well as how do you intend to acquire these customers. Even though this is the important part to reveal what is your business about, get quickly to the interesting part for the investor — your revenue model.
4. Show them the exit — even though the entrepreneur’s thinking process is often to create an impact in the society, create a long-term business that will keep him or her engaged and richly employed. In contrast, the investor’s thinking process is usually more short-termed. They make their decision based on “How do I make a lot of money in a short to moderate time frame?” — that is the question you should answer the investor before he even ask it. The best elevator speech in the world will not result in any money unless you can deliver an analytical and believable business plan explaining how an investment in the startup will make its investors rich.
The goal of a successful pitch is to have investors begging to invest in your company. Needless to say, this is not easy.
When you successfully deliver on what an investor wants, you will have a truly irresistible pitch.