Tips for Creating a Successful Pitch for Investment
Here it is. You have the chance you’ve dreamed of as an entrepreneur, and it all boils down to the next several minutes of your pitch. Make sure you’re ready for this moment.
Guy Kawasaki, Apple’s first evangelist and a Founder of Silicon Valley’s Garage Technology Ventures has said, “Most people miss the primary point, which is to sell, not educate. The purpose of a pitch is to get people excited about your concept, to get them excited about the opportunity, and have them want to move forward with you.” It’s an easy point to miss, but he’s right…the primary goal of any pitch is to sell. Most investors really want an overview to start, an understanding of the basics. Be sure not to get caught up in the details.
We’ve pulled together some of the best advice from leaders in the field to share with you. Remember nothing is written in concrete, adapt and change as you see fit.
Overview: Start by telling a clear easy to understand story, and one that’s easy to repeat. Keep it simple and stay with the highpoints. Share your core value proposition, what benefit do you bring to the table, and how does it address a specific and existing need. The overview is your chance to firmly establish what the company is and what it does.
Opportunity: Be prepared to discuss the problem, pain point, or opportunity you see in the market and talk about why it exists, how you’re going to address it, and how well you understand the market dynamics around the issue. Also be prepared to describe the size of the opportunity.
Your Solution: Tell people clearly and simply what your solution is and how it addresses the opportunity identified. Talk about the specific target market(s) you’re going after. Don’t get hung up on jargon, make sure you’re using language that means something to your audience.
Demonstrate: Now that you’ve identified the problem and addressed the solution it’s an excellent time for a brief demonstration of your product if you have one. Keep it simple, don’t try to show everything and make sure you ask for and answer questions. Talk about how your solution fits into the marketplace and how you will deliver it if supported.
Value: It’s time to get very real. Share your three-to-four key benefits. Tell potential investors how you will identify customers/partners who understand and value these benefits and engage them. Explain your rollout strategy and how you plan to accomplish it.
Competitive Advantage: Take all of the information you’ve shared to this point and talk about how it comes together in a competitive advantage. Show the major competitors in the market, and share their strengths and weaknesses.
Engagement: This is where you can address any early conversations with potential customers/partners and provide feedback from them that validates your idea. It’s also the time to share any commitments others have made to evaluate or use your solution. Talk about how you’re going to continue engaging key parties who can derive value from your offering, and be prepared to defend any statements/assumptions you make.
The Business Model: How do you make money? Go through your plan to start, build, and achieve success in the marketplace. What will customers pay? How long will it take to acquire them? Your business model is where the investors will dive in to test your assumptions and challenge your model. It’s the best opportunity you will have to show that you know your market and can create a successful business.
Financial Projections: All right, it all comes together here. Show your projections and put everything on the table. Plan on a five-year model, and yes it will change, but you need this out of the gate. Projections are where you can reinforce that you know what you’re talking about and understand both the marketplace and the target customer.
What You Need: From the financials, it should be a smooth transition into what you are seeking for investment and how it will be used to achieve your plan you have presented. What are your milestones and how will you hit each of them? Investors also want to understand that you are seeking the “right” amount of funding to achieve success. This is your operating plan for building value and showing them you know what you are talking about.
Summary: Time to bring it all together. Think of this as your elevator pitch—an opportunity to summarize the idea, the opportunity, and how the company will succeed in the marketplace.
These tips should serve as a guideline to effectively tell your story and demonstrate the value that your product or service has to offer. The reality is that not every investor will be ready to write that initial check, so post-pitch evaluation is as valuable as the work that you put into the presentation. Use that feedback to continue to refine your pitch – it’s a living thing. Understand if there are elements of apprehension for investment, and how to overcome them for your next presentation.