Seven ways for improving your pitch to investors as a startup founder
Every investor will want a conversation about where you think your company is headed
Writing for Business Advice, public speaking specialist Hanieh Vidmar offers startup founders seven pitching tips that could make the difference in front of investors.
Pitches are extremely important and can be a big part of raising investment or funds for your business or your new business idea. Pitches can come in all shapes and sizes – phone calls, videos, online conferences, meetings – and the all important presentation.
This might come as a shocking comment to many, but I actually love pitching to investors and decision makers. I get such a buzz from it and I’ve delivered a lot of successful pitches in the past and won various contracts and raised a lot of money. I enjoyed every single one – even one particular one that went disastrously wrong. More on that in another article…
In this article, I want to share my seven top tips on how to make your investment pitch better. Please note, these tips won’t guarantee investment but by implementing these tips into your future pitches, you can maximise your chances of success.
Before we dive further, I’d like to share a couple of statistics with you. An investor shared these statistics with me and they are eye opening stats! They are not to frighten you, but to help you understand why having a great pitch, personality and of course a great product, will help you stand out from the rest.
Out of 2000-3000 startups that approach this investment firm every year, they only invest in 10. They meet around 300-350 businesses per year. That means, they have a 10% chance of securing a meeting and from there, only a 3% chance of securing investment.
3% chance of securing investment after a 10% chance of securing a meeting! Very interesting statistics and very useful to know. Now you know why having a great pitch, personality and product is vital.
I will now share my top 7 tips on how to get the most out of your pitches.
You have many different types of investors and each come with their own terms and conditions and risk level tolerance. Every investor or investment firm are suited to different types of businesses so make sure you do your due diligence on who you’re approaching, who you’re talking to and what their expectations are.
Don’t waste your time or the investors time by talking to the wrong firm. When you know you’ll be in front of the right investors, then you can start carving your pitch and message.
Know your business inside out; know your financial forecast, know your
competitors, know your market; is it big enough and if it’s a new market, is it patented? Know your potential growth % month on month, know the objections too and potential issues you could face down the line, know your organisation chart. The investors will have a lot of questions and you must know the answers to all of them. Knowing the answers will demonstrate many things as we will find out more shortly.
Good ideas are everywhere. You can spot a gap in the market or come up with a really
useful product or app whilst having dinner with your friends. But if the passion isn’t there, investors will pick up on this and wonder if you’d get bored soon. Present businesses you’re passionate and excited about as being passionate about what you’re doing is one of the ways to reap the rewards.
Also, pitching to investors is a huge task – it takes confidence, conviction, time, energy, focus, knowledge, and without the passion, you simply wouldn’t put in the effort that the investors want to and need to see! If you’re shy and pitching scares you, focus on what you’re doing and believe in what you’re doing.
Conviction and confidence come through via your passion, so really believe in what you’re doing and go fully prepared.
One thing investors would love to hear is your story. Why did you come up with this product? What’s your pain points? Why do you know this problem well? What success have you gained in the past? What’s the story behind your business? Be authentic in this. Share your story as investors look at spreadsheets, graphs, tables and numbers all day long.
Hearing your story is a breath of fresh air for them and it helps them understand, see and feel your passion better. Sharing your business story also helps you stand out from the rest of the fund seekers – the ones that focus on numbers and stats – which is important of course, but sharing your story gets you extra attention.
Something to remember when sharing your story or background is to only share what’s relevant. Don’t go on and on about something personal if it has no relevance to the business, pitch or product. Keep it relevant and make sure everything is kept to the point.
When you’re ready to pitch to the investors, go with your team, if you have one. Investors look for a strong CEO. The CEO needs to lead the pitch , conversation and organise its delivery. If there’s only two of you, i.e. CEO and the CTO, then deliver the pitch together.
The CEO, for example, can introduce the CTO to the investors, ask them to step in and explain the technology and product set up further. This shows the investors that the CEO trusts the team and can rely on them in the business.
Never interrupt each other when pitching – interruptions can make it look like the team are undermining each other rather than supporting each other, which is never a good idea.
You want to show that you’re a strong team that can communicate everything effectively – especially in your first few meetings. Some investors will not invest in a business if they don’t see eye to eye with the team as they’ll be with the business for about 5 years, so they’ll want to get on with them.
The investors want to see you speak and present the business to them – not to have you turn your back on them and read from your slides.
If you have an in-depth, wordy slide deck then you could send this to the investors so they can read it themselves. The one you use for the pitch should be simple, straight to the point, light and used only to assist you in your presentation. Talk to the investors and explain everything yourself.
Every investor will require something different when it comes to your financial
projections or revenue. If you’re a startup, then your projections won’t be spot on. It’s very rare for a company to hit their exact projections when doing their business plan – they either make more or less, some even close shop.
But investors will have a conversation about where you think the company is headed and they’ll want to know what you want to do with the money you’re raising and over what period of time. If you’re already in business and require money for growth, then your revenue numbers will need to be exact. This conversation will happen so make sure you know your numbers and that they’re realistic.
Refer back to point 1 – know who you’re talking to and what they want. Some investors want to know the market and product before talking about finances, others focus heavily on finances. Either way, always be prepared.
I hope you found the seven tips useful. Pitching is not meant to be scary. The investors have decided to meet you because they know that you and your business have great potential – they want to know more.
Go fully prepared and believe in yourself so you make the most out of this incredible opportunity.
Hanieh Vidmar is a speaker, trainer and former TV Presenter. She’s delivered pitches on behalf of other companies, won contracts and raised over £1m in funds. Her goal is to help as many people overcome their fears of public speaking so they can achieve bigger and better goals with confidence.
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