Pitching your business idea to a prospective investor is tough. Hands down, it will be the hardest presentation you are ever likely to do in your career.
Here are some tips to getting it right.
1. Know what an investor is looking for
No matter the type of investor, they need to be confident that your business will attract and retain customers. You need to inspire confidence with facts, not fiction.
Any investor is looking for the lowest risk with the highest return, as quickly as possible.
Proven business management skills are what bank managers look for in a presentation. They want to know that five years from now, you can still be at the helm and successfully guiding the company forward. Showing some initial cash flow from revenues and limited costs has a better chance of getting investors than a business plan that forecasts large returns in the future.
Investors are normally looking for one of the following three things to be of a really stand-out quality. Ideally, all three.
The team: It will be important to show how you have the right team with the most relevant experience and skills
The idea: If your idea will have a truly huge impact on the world (think the next WhatsApp, Amazon or technology that will revolutionise the way in which we live) then they’ll probably be interested in investing.
The market: Is the market huge? Or is it niche-buy, very profitable, and so on.
These considerations are important to prepare for and to tailor your presentation around.
2. Do your homework
There are many investors and many types – angel investors and venture capitalists for example – and each has specific ways of working which must be adhered to. If an investor normally invests in enterprise products for the US, then that’s what you’d better be! Find an investor that suits your product or market.
Before even considering pitching, create the following:
Business plan including financials: Profit and loss/Understand and be comfortable with cost of acquisition, life time value, cash burn etc.
If relevant, investigate and do the paperwork for EIS, SEIS and other related tax breaks – these can be hugely important to investors, as they can make their investments more tax-efficient.
3. Think about your presentation’s structure
Use a story structure to frame your story. The suggested story flow below can help focus what you want to tell an investor, in an order that interests them.
All investors differ, of course, but the following structure for your business pitch will be impactful in most situations:
Title:State what it is you are doing. This is something that will stay up on the screen for a while while audience members are sitting down, exchanging small talk etc. Use it wisely. Include a big benefit statement for your customers, for example.
Case studies:Clearly explain what your customers’ stories are, pain points, needs, desires, etc. Enable investors to really know your customers – using video would be great.
Market size:How many people like John are there? Make the investor excited about the market potential.
Solution: What you have created for this gap in the market.
Traction and engagement: Your early successes.
Team: Why it’s the best team to make the business successful.
Business model: Where the revenue is coming from.
Looking to the future
Market plan: Now and in the future.
Customer segmentation: Show you know who your customers are.
Customer feedback: Give early quotes/testimonials – again, video is best.
Competitive landscape: Who your competitors are.
Competitive differentiators: Why you are better than your competitors.
The ask: What you need in terms of investment.
Summary: Top three things you want them to remember.
4. Think like a designer
A well-designed presentation can level the playing field against larger competitors. It can also give you an edge over other start-ups that are pitching for investors’ or banks’ money.
First of all, choose your presentation software. The software you choose can also help get you noticed. Everyone knows about Microsoft PowerPoint, but there are new alternatives out there that you can also use – Google Slides and Prezi are two of the most popular.
Although most of us are not designers, there are still a few tips we can use that will seriously up our presentation design game. There are a few critical things to focus on when designing your presentation:
1. Keep text to a minimum: Think headlines not paragraphs! Your audience can read quicker than you can talk so don’t have your script on the screen.
2. One thought at a time: Only have one main thing on the screen. Any more than this, and you start to lose people.
3. Use colour wisely: Pick a complimentary colour palette and use it consistently. Use Adobe’s complimentary colour wheel to get yourself a set of colours that go together well.
4. Use great photography: Invest a small amount of money (£5-£30) into buying images from somewhere like istockphoto. Great images help make your presentation stand out.
5. Fonts: Use a business-style font that sets the right tone. Use it consistently, but don’t be afraid to use another font in certain places to highlight a word or two.
Pitching your company in 30 seconds: The elevator pitch
‘What do you do?’ is a question that can put even the most seasoned business brain under pressure.
In today’s mobile business climate you never know when an opportunity is going to present itself. You will probably only have one chance to paint the best picture of your business to a prospective client or partner.
Your elevator pitch helps you to articulate the essence of your business in the fewest possible amount of words. What do you do? Who do you do it for? What does this mean to them?
These are the questions that you need to answer in the time it takes to take a lift from the ground to the top floor. Don’t alienate your target with a deluge of facts and figures; your objective here is not to close. It is to lay the foundations for the opportunity to do so.
Without an elevator pitch your explanation of your business is likely to become a drawn out response filled with needless detail. Effective elevator pitches, particularly in busy surroundings, get straight to the point. Don’t give your target time to get distracted. A short, precise presentation is perfect for those ad hoc opportunities.
Your pitch should be no more than 30 to 40 seconds in length. When structuring it consider the following outline, adding short details relevant to your business:
We work with…
Who have a problem with…
What we do is…
Which means that…
So that you can…
The first two sections are pretty straightforward. It is likely that your company may have more than one offering; however, limit yourself to your flagship product and in the third section focus on the collective purpose behind all your services.
The final two sections are dedicated to the benefits, both long and short term. These are vital to any proposal but should also be succinctly-expressed during an elevator pitch. It is important that your prospect does not have to do too much thinking. The sooner they see the value of your business the more likely you are to progress with the sales process.
The delivery is as important as the content within your elevator pitch. Clear and confident communication is a must, so get as much practice as you can. Always refresh and rehearse your pitch until it screams value and conviction.