Pitching your startup is an intimidating process. In the space of a few minutes, you’ll have to explain your idea and why the investors should invest their hard-earned money into it. So you’re asking yourself, what are those ingredients that will make for a compelling and unforgettable pitch? Here are 5 tips to keep in mind when preparing your pitch:
- Keep it simple. You have a very limited time frame in order to pitch your startup. Therefore, the more concise you can be, the more effective you will be. You need to focus on the key components of your pitch. While the value of the startup may seem obvious to you, great ideas must be backed by clear goals and objectives. Consider what an investor actually needs to know. A memorable pitch is authentic, organized, clear and concise. As Albert Einstein once said: “If you can’t explain it simply, then you don’t understand it well enough.”
- Transform your pitch into a story. Everyone loves a good story, even the most number oriented investor. You can safely assume that most investors won’t remember all the data and numbers you presented. However, integrating a story into your pitch not only makes you more memorable but more personal as well. Your story should contain claims and facts that the investors can easily validate and relate to. Also, using an analogy or a personal story can be very effective.
- Start with a problem, end with a solution. You need to describe the problem your startup solves and show evidence that the problem is real and important, and that those facing it are willing to use a new product or service to solve it. Explain exactly what your product or service is. Show your potential investors a picture of the product or give them the actual product to handle. If investors want to invest in something, they need to know why they should choose your team and your solution. You need to demonstrate that you understand the marketplace, and be able to explain why an opportunity exists for your solution and that you have set up the right team and processes to deliver the solution to the market. Beware of buzzwords – using terms like “AI”, “big data” or “machine learning” won’t score you points unless you can back it up with substance and explain why and how those are actually relevant to your solution.
- Why you? You should have a unique selling proposition which you can communicate clearly. You need to address those investors in the crowd who may be thinking “Haven’t I heard this before?” or “Surely others are doing this”. Another potential question you may need to address is “Why wasn’t this solved before?” Include market statistics in your story but aim to focus on your unique market understandings in order to be able to convey what is the market opportunity for your solution. This should answer the question “Why is this necessary?” Have a deep understanding of the key drivers of your business, your potential customers and what your team is focused on. Keep in mind that investors are also interested in your team as well as their capabilities and experience.
- Do your homework. Who you pitch to is nearly as important as what you pitch. To prepare a good pitch you have to know your audience. Know who you’re talking to and what their interests are. Understand which investors are right for you by learning about them, whether by taking a look at their website, Facebook and LinkedIn, examining their portfolio, talking to the founders of their portfolio companies, etc. Practice makes Perfect! Anticipate questions and answer them ahead of time. Practice the pitch with your team members, friends and family and see what are the most common questions that come up, and then tailor the pitch to address these common questions.
A pitch is just like a first date, you want to showcase your best qualities so that there’s a good basis for a second date. You want to get your investors interested enough so that they will want to engage you. Be mindful that investors are unlikely to invest in your startup after just one meeting, but if they are interested enough you can elaborate further during your follow-up meeting. After you’ve covered the standard key elements of your presentation, make sure you finish in a meaningful and effective message – summarize your key strengths and reinforce the reason they should invest in your startup.
Finally, be excited and passionate about your solution! Investors want to see someone who is excited about his/her ideas and confidence is also key to conveying the right message to the investors. While you want your solution to be the thing that stands out, remember that you are also part of the solution. Don’t be discouraged if the feedback is negative – every investor has different interests and objectives, so stay optimistic and don’t give up.