- Geekmaster
- 2022-05-07 09:52:29
- 21 minute(s)
Five Tips For Delivering a Winning Pitch to Venture Capitalists
A key part of starting your own business is finding funding. As a startup entrepreneur, you must create a convincing argument that will persuade venture capitalists, business owners, potential clients, or other investors to help make your dream a reality. Before you schedule a meeting with an angel investor, here are a few tips to help you craft the perfect pitch and deliver a winning pitch to venture capitalists.
If you want to introduce investors and prospects to your business idea and convince them to take the plunge with you, you need a strong, persuasive business pitch.
When you have a stellar idea, you want to share it with the world — but you need resources to bring it from concept to reality. This is where a compelling pitch comes into play. For every 1,000 pitches an investor hears, he or she will fund only 100 of them. Statistically, the odds for success are not great. You can beat the statistics, however, by crafting a pitch that that turns heads and gets funded. The good news — it’s possible to craft a convincing and successful business pitch.
Your pitch is the single thing that could either get your business off the ground or plunge your idea into eternal oblivion. It matters.
Pitching a business idea is one of the most nerve-wracking parts of any entrepreneur’s journey. It’s what stands in the way between your vision and the financing needed to turn that vision into reality. Pitching is the most nerve-wracking part of the idea creation process, and few excel at it, but it doesn’t need to be so difficult. When I think about what set those excellent pitches apart from the rest, it turns out that they all shared some of the same qualities. If you employ the five tips below for taking a good pitch and making it great, you’re going to give the kind of pitch that stands out to investors, too.
So, what are the ingredients of an ultra-compelling, irresistible, outstanding, and unforgettable pitch? Let’s find out!
Even if you’re not a born salesperson, you can promote your ideas effectively with a well-planned pitch. Take a look at these five easy-to-follow tips for delivering a winning pitch to venture capitalists.
Pitch Tips #1: Prepare With Care
Making a pitch is all about preparation. List the ingredients of your pitch to make sure it’s foolproof. What goes into all great pitches? Well, there’s the elevator pitch which is a great starting point. It gives your audience the kernel of your idea and leaves them eager to find out more. The elevator pitch is a one-sentence summary of your proposition — the thing you want people to remember after they leave the room. It needs to explain what your idea does, who it’s for, and why it’s great.
Whatever great tips you pick up for delivering irresistible pitches, there’s no escaping the fact that if you want to get it right, you’re going to have to spend time up front doing your research.
You need to know everything about the client, its product or service, who it’s targeting, who its competitors are; all of that and much more before you can properly start building your proposal. There’s no shortcut here, but doing your research properly will pay off handsomely; you should come out of it with the best possible understanding of what you need to do, and when it comes to the actual pitch you’ll be able to confidently answer any questions the client has for you.
Anticipate what questions you may be asked and have answers prepared.
Ideally, you’ll have anticipated these questions and worked the answers into your presentation, but there will undoubtedly be additional information requested. Make sure you know your projected product inside and out so you can confidently provide concise answers to your investors’ inquiries. Make sure you know your product’s audience as well as competitors and be sure you’re pitching to the right kind of investors. The right investors are those whose interests align with those of you and your ideas. Double-check your numbers, make sure you have evidence to back your claims and keep your pitch as clean and understandable as possible.
Someone has saidWhen it comes to the actual pitch you have just one chance to make the best possible impression, and to do that you’re going to need to rehearse.
If you’ve spent ages writing up and fine-tuning your pitch you’re going to feel that you already know it inside-out; however if you want to turn your well-chosen words into a winning presentation then there’s no substitute for rehearsal. Merely reading out your pitch is a dangerous game, especially if you’re nervous about public speaking. You’ll constantly have an eye on your written words and you won’t be engaging with your audience. But if you take the time to read your pitch out loud, over and over, you’ll soon become much more comfortable with its rhythms and you’ll be able to deliver it in a much more confident and conversational manner; you’ll also be able to deal with the inevitable questions and interruptions without feeling flustered.
The investment pitch is your chance to change the trajectory of your business.
I’ll say it again: don’t underestimate the importance of preparing your pitch and practicing it over and again. With practice, you’ll be able to speak to any element of the pitch deck with authority. Plus, you’ll know how long it takes you to present your ideas. Rehearsing in front of an audience can also help you know if you’re talking too fast or have some physical tick that could distract from what you’re saying. Preparation is key when you pitch to investors. When it comes to the execution of your pitch to investors, speak with confidence, tell the story with the support of facts and figures.
Pitch Tips #2: Keep It Short
I’ve heard many entrepreneurs deliver their pitch as if they’re auctioning off their grandmother’s antiques. It must be because they think they need to address every aspect of their business plan in one fell swoop, but doing so makes them seem anxious, tense, and nervous. I always wish they’d relax and realize that when you’re giving a pitch, less is more. Prioritize the most important things you want to share and stick to those pieces — and take a nice big breath before you speak. Believe me, it will help you deliver a more compelling and thoughtful pitch.
It’s a known fact that attention spans are getting shorter and shorter.
Whether it’s the length of books, blogs or broadcasts, everything is shrinking. Don’t waste time with preambles. Give them an overview of your compelling proposition quickly, and succinctly, and you’re more likely to capture and hold your listener’s attention at the crucial start of your pitch. You can use the Elevator Pitch Builder from Harvard Business School, which gives you one minute to explain yourself, your business and your goals. This might sound like a lot to cram into just 10 to 20 slides, and that’s because it is. The hardest part about creating a compelling pitch deck is keeping it short and sweet.
Because time is important, you need to develop an absolute focus on the core components of your pitch.
Investors’ time is their most valuable asset. If you convey a respect for their time, they will interpret that respect as your ability to treat their funding with respect. Just about every venture capital expert will tell you to minimize the number of slides you use. Leonhard Widrich and Joel Gascoigne, founders of Buffer, used 13 slides to land $500,000 in three months. In “How To Create An Enchanting Pitch,” Guy Kawasaki, who was one of Buffer’s advisors, provides a ready-made slide deck that you can download. This 10-slide deck will prevent you from going astray by adding too many slides.
Someone has said
If you can get someone who doesn’t understand your business model to grasp what you’re communicating, then you’re prepared to give a pretty good pitch.
Some of the worst pitches I’ve seen have been filled with acronyms, tech speak, and gobbledygook. Keep your pitch short, sweet, and to the point. Practice your pitch on someone outside of your company, and ask them to repeat what they think your business model is back to you and ask you questions. I’ve done this many times, and it’s always an eye-opening exercise to hear what people repeat back. Great business pitches are usually framed as a story — either drawing from your own life experience or working as a hypothetical situation with a fictional person. As you develop your pitch, focus on telling a story that addresses the problem and how your small business solves it. By complementing your spreadsheets and charts with a compelling story, you can paint a fuller picture of your startup’s future and more effectively highlight the opportunity in the market.
Keeping your presentation as concise as possible cannot be overstated.
People are busy, and the time they’ve dedicated to hearing your pitch should be treated like the gift it is and used to the best possible advantage. If investors can’t remain interested or don’t understand your idea pretty quickly, they’ll conclude that their customers won’t understand or care for it either. Keep your pitch focused on the core idea of your proposition. One analogy I heard recently was aircraft carriers. They’re unbelievably sophisticated, complex systems, but their purpose is simple – they allow countries to project power around the world. To appreciate this you don’t need to understand the inner workings, just the end result.
Pitch Tips #3: Know Your Audience
It’s standard advice to “know your audience”. However, if you’d like to become better at your business pitches, go the extra mile by understanding what your audience wants from you. There’s a difference between understanding and knowing your audience. Instead of just knowing where investors come from, try to understand their pain points, goals, and motivation. For example, if you’re pitching to potential clients and investors who are eco-conscious at the same time, it makes sense to highlight how your idea can positively impact the environment.
Even though you’re pitching the same service or product every time, you can’t just memorize a few lines and go from there.
Each opportunity is different — you’ll need to tailor how you pitch to the person you’re pitching to, the social situation, and his or her level of understanding and interest. Author and business etiquette expert Jacqueline Whitmore likens pitching to playing an instrument: “You want to memorize the melody so you can improvise variations and still sound authentic instead of rehearsed.” Jazz might sound like it’s being made up on the spot, but there are years of theory and study behind each improvised line. When you pitch an idea, you want the same type of sound: tailor-made for that person, but with a solid backing of thought and attention based on your experience.
What appeals to an investor might not be very persuasive to a potential partner or an employee you’d like to bring on board.
This means you’ll need to think about how to pitch your startup idea to different audiences and tailor your pitch accordingly. Your core message can be the same, but you should be willing to make tweaks and adjustments for each audience. Some entrepreneurs try to get in front of every investor, despite their industry expertise or firm’s investment stage. You need to consider that, when you accept an investment, it’s about more than money; you enter into a partnership. You must perform your due diligence and research potential investors before making your pitch.
This sounds simple, but in fact your audience’s interests, traits, and inclinations might be more elusive than you realize.
Knowing your audience begins with identifying all of the assumptions that you hold about your audience. You can only tailor your message uniquely for your audience when you know your assumptions about them, anticipate how they will react to your message, and learn from them through authentic and transparent conversation. Crafting a generalized message that is intended to appeal to multiple audiences will likely appeal to none of them. Show your audience the respect they deserve by crafting a uniquely tailored message for them guided by these concepts. A tailored message fits like a finely tailored suit. Your audience is more likely to respond when they see how your attention to their particular details informed your message.
There is no such thing as a perfect all-purpose pitch.
Context is everything — tell people the right amount of your story and you have the best chance of winning them over. Tell them the wrong amount of your story and you’ll either bore them, confuse them or annoy them, which rarely translates into support. For instance, investors pride themselves on cutting to the chase, so there’s no room for fluff or long windedness. Instead, the aim here is to give a concise overview on what the business does, how it works, who it serves and how it makes money. That financial component is really important, because it’s the main question on the investor’s mind, and other useful information can’t get through until this question is resolved. A pitch should tell a clear story about the business model, followed by an explanation of why you’re the right person to do this work (better than anyone else). Once that’s out of the way, you have lots of room for origin stories, technical details and social impact models.
Pitch Tips #4: Show. Don't tell.
There are few things worse than a slide full of dense paragraphs, so turn to visuals whenever possible. Telling your story effectively requires you to paint a picture that helps your audience visualize how you can make them more successful. A slide with a bullet point about your company’s rapid expansion won’t have the same impact as a bar graph showing year-over-year growth. Ensure your slides illustrate a story and that you can match the illustration with supporting anecdotes.
There’s a reason that Apple Stores let you play with every product they have on display.
Behavioral psychologists have discovered that creating an “ownership experience” by letting potential buyers “try before they buy” is a powerful way to close sales. You can use this same technique in your pitch. If you’re still in the design phase, creating a prototype or wireframes using tools like InVision, Marvel, or RedPen are great ways to show off the functionality and design of your tools without doing any actual coding. If you’re making a physical product but haven’t actually created it yet, you can easily go to a freelancer marketplace like 99designs, Crew, Fiverr, or Upwork and find a designer who can make a beautiful 3-D rendering for you.
Sure you should be dressed for the occasion. But you are not the star of the show. Your product is.
But before you talk about your product, you should focus on the problem it solves. Who has the problem, why is it important and how is your product going to solve this. Then focus on your product. Emphasizing how your product work is a key thing you need to work on during a product pitch. You can demonstrate how your product works in front of your investors. You can do this by referring to a process map and a sample of your product. And if you can hand them a few samples of your product and let them operate it, that would also be more impactful.
Being able to show social proof for your idea is an incredible tool to use when pitching.
It transfers the clout of the person using your product or service to you and shows investors and clients that there is a real market need for what you’re doing. If you have customers, start by asking them to go on quick calls and talk about their experience. Or send out a quick survey through Typeform or Google Forms asking what they think and if it’s OK to share their comments with investors and potential customers. Not only will this give you important insight into how real people are using your product, but you’ll also get some great soundbites you can share in your pitch.
Investors are always interested in the bottom line, but before they get down to business, founders need to wow them.
Without a product mockup, even the best ideas are just hot air. A well-crafted pitch is like a crystal ball that lets your prospective stakeholders glimpse your (and, by extension, their) future success. Including inspiring design assets as a part of your business case is an unmissable opportunity to demonstrate the clarity of your vision. Polished, high-quality startup product mockups that feel like the “real thing” go a long way toward inspiring investors’ confidence in your idea and boosting your credibility as a professional who’s able to execute. Product mockups are a powerful sales tool because they allow founders to make the future less abstract and the possibilities more concrete. This positions founders as visionaries and invites investors and stakeholders to not only buy into the potential of the idea but also into the founder’s potential to bring it to life.
Pitch Tips #5: Address Competition Head-on
First of all, never say “I don’t have any competition.” This is a rookie mistake, but many entrepreneurs say this. Everyone has competition, even if it’s indirect competition. Think about when Henry Ford built the Model T. Were there other cars on the market at that time? No, but he had to find a way to steal people away from other modes of transportation (horses, trains, and walking, for example).
You’ll need to channel all your confidence and passion to explain to your audience that you understand your competitors and that you’ve got a trick up your sleeve that will blow them out of the water.
There are three main points you want to address here:
- Competition: Who’s already in the ring? Acknowledging competition tells investors you’re on top of the market and that you have strategies in mind to beat the other options out there.
- Proprietary technology: What unfair advantages, IP, technologies, and innovations are unique to your company and will KO the competition?
- Marketing plan: How are you going to get millions of users or customers? Outline your long-term plan for customer acquisition and the strategies you’re going to use to get people to stand up and take notice.
If you are not producing or providing anything different from the run-of-the-mill widget, don’t even go to the meeting.
Show investors what sets you apart from other players in the industry. Highlight the company’s vision and let investors determine your ability to become a key player in your niche.
Demonstrate how the product is competitive in the market and show your industry knowledge regarding possibilities and obstacles. Ensure to quantify the product benefits you plan to include in the competition slide. For instance, you can say that your product is 3 times powerful than the competitors’. And don’t forget to prove that! List your product benefits in priority order based on your business’ value proposition and customer needs. When creating your competitor slide, make your differentiators as straightforward as possible. For example, if your startup has a crucial benefit but competitors don’t have it, mark its column and leave those of competitors unmarked.
Identify your differentiators — the things that make you unique or different from your competition.
A quick statement like “we’re the only company who does x” or “companies recognize we are uniquely positioned to help them accomplish x” creates separation between you and other companies out there who may be claiming similar capabilities. The competitive slide is what investors call a “make or break” slide. Investors mention that they always encounter competitive slides where the startup is positioned unreasonably well. It’s a brow-raising occurrence for investors during pitch presentations. They believe the founder may not be aware of their market, or that they are being dishonest. Investors advised against choosing irrelevant points of comparison. According to investors, there is much to consider in the startup’s competitor analysis. More than just features and benefits, founders also need to consider the status quo. What are the current trends that drive the target market to purchase?
Wrapping Up
A well-crafted pitch is your best chance to present your vision for a better business, whether you’re selling your ideas or your venture. It’s more than just a slide deck: it represents your company, what you stand for and what you can do for your audience. Treat your pitch — and your audience — with the respect they deserve.
The goal of a successful pitch is to have investors begging to invest in your company.
Sure, that sounds too good to be true, but it is possible. Bear in mind that every investor prioritizes different data and information. Yet, if you start by choosing the right investor and then align their needs with your proposed market opportunity, value proposition, and exit strategy, you have a chance at landing the pitch.
You’ll really never know how good your pitch is until you actually do it.
Don’t stress yourself out, and treat every investor pitch as a learning experience for you and your business. You’ll only continue to get better and better and can apply those learnings to every area of your business. If I had to summarize the general objective of a pitch, I’d say it’s “to move to action”, and you’ll only be able to get your audience to take action if you are able to get their attention in the first seconds of your pitch. Then, you’ll need to follow that up by achieving and maintaining the WoW effect throughout your presentation.
Making a successful business pitch to your investors may seem challenging, but using the right approach will surely bring you supporters.
If you’ve piqued the investors’ interest enough for them to want more after you’ve finished your pitch, then you have successfully pitched your business. If you’ve become obsessed with this business idea after learning everything about the industry, you will be fine. You will get someone to invest in your business. Once again, each pitch is a chance to better your business and build relationships, so don’t get discouraged if it takes time to perfect this skill. Practice makes perfect, so keep swinging for the fences and soon you’ll hit it out of the park.
When you successfully deliver on what an investor wants, you will have a truly irresistible pitch.
While it may be nerve-wracking, particularly if it’s the first time that you’re creating a business pitch, use the expert tips above as your guideposts for a successful pitch. You’ll eventually have your unique style and approach to business pitching as you do it more frequently. Do you have other tips that help rouse your dressing room and make the perfect pitch? I’d love to hear about them in the comments below.
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I really enjoyed reading this blog post about delivering a winning pitch to venture capitalists. As someone who has had to pitch to investors before, I can attest to the importance of knowing your audience and tailoring your pitch to their interests. The tips mentioned in the post are spot on and can make a huge difference in getting investors to buy into your vision. Thank you for sharing.