Pitching as a startup founder or business owner is a fairly standard practice. However, as it can make or break your business or its growth, a pitch, in general, needs to be finely tuned. Even more when aimed at investors.
After defining why, from whom and when you want to raise funds, you will have to take care of your investor package. It will be composed of the documents that will accompany you throughout your fundraising, namely:
– a business plan,
– an executive summary of your business plan,
– your financial model (over 3 years at least),
– the famous and dreaded pitch deck (short and long version)
Each document has its importance, but the pitch is maybe the most important document in the investor pack. It is the one that acts as a brochure for your startup. This document will require a lot of work and preparation! A pitch must follow a specific model and address a number of points. So, how to craft a successful pitch for investors?
Study the pitch decks of the startups that inspire you
I advise you to draw inspiration from other startups’ pitches and not to hesitate to ask them for advice on how they did structure their pitch. It is necessary not to reinvent the wheel. Rather, leverage what has been tried and tested.
Check out some of these for instance:
- Buffer: https://www.slideshare.net/Bufferapp/buffer-seedrounddeck
- Moz: https://www.slideshare.net/randfish/seomoz-pitch-deck-july-2011
Do also read (a lot of) blogs and watch videos on the subject. Never forget that the Internet is your best ally, so don’t hesitate to look for and ask as much information as possible!
Tell a story
People don’t necessarily buy a product. They buy a use and, in some cases, a story.
First and foremost, your pitch should allow you to tell a story to your audience. The quality of your narration is the key to any successful pitch. It is very important to be able to seduce your audience from the beginning and make them want to invest. It is imperative to structure your pitch around a story and the journey made, playing on feelings and keeping the audience connected.
You need to think about how you will tell the story of your product or service and ask yourself these questions:
– What stories would you like your users or customers to tell?
– What are your motivations?
– How did it all start?
– How far have you come?
– What mistakes have you made and what lessons have you learned from them?
– Why does your company present a real investment opportunity?
Once your story and guidelines have been defined, you can start writing your pitch, keeping in mind that you need to appeal to your audience. Don’t forget to create excitement by unveiling your assets to convince your investors. History, team, market: the fundamental ingredients of your pitch.
Go back to the origin of the story: explain why
Don’t think that the story of how your project was created doesn’t matter. On the contrary, it is crucial in understanding your vision and investors will attach great importance to it. Especially if you are at an early stage of your project and you don’t have any metrics to present. An investor, therefore, needs to understand how you became an entrepreneur and why you decided to give it a go – or will be able to forge ahead.
At this stage, you must pit the concept of your startup, show your vision of the future and your path to get there. It is imperative that your investors share the same vision and validate your theory. In addition, going back to the beginnings of your startup will allow you to play on affect and emotions and remind investors how the idea of creating your startup came to you.
Regarding the idea, product, service, make it as clear as possible, from the start. If you are telling a (long) story to people who still don’t have a clue what you are talking about, you might lose them in the process.
Once you have defined that part, show and tell who you are because an investment is made first and foremost in men and women. You, founder(s) and team members, are the true assets and value of a startup.
Reveal the team behind your startup and what makes it strong
Behind every business are people. At the beginning of your project, the founding team is the glue of your company. If it crumbles, the whole operation is at risk of collapsing too.
You are aware of this and so are your investors… That is why many investors still are wary of financing companies built by a single founder – though this narrative is slowly changing in light of various individual achievements and actual measures of success – to mitigate their exposure to a possible accident, burnout risk or else as much as possible.
Companies with several founders are therefore more likely to be financed for this reason and also because they bring together more skills and can move faster. The investors will check whether the team has the necessary skills to carry out its project internally. If you are missing a key skill, it is important that you expand your team. You do not create a law firm without a lawyer, a digital startup without digital – and technical – skills, a genomics company without an expert in the field, etc.
In addition to the team’s skills, the investors will also want to understand what binds the founding team. It is important to remember here that founders disputes are one of the main causes of death for startups. Being long-time friends is a good thing, but it can also have its disadvantages if you do not create a professional and transparent atmosphere. In a similar way, investors may have cold feet when it comes to financing couples too. For similar reasons.
Explain who you are talking to and the path to securing your market share
For investors to consider the opportunity represented by your startup, they must understand the market you are targeting, but also how you will make yourself known and acquire users or customers.
The market is perhaps the most important criterion for an investor. The larger your market, the higher your income can be. However, it is best to start small and target a specific segment of your market. This will then facilitate your penetration into this market.
You must have surveyed your market and met with potential customers to validate your basic assumptions. That is if you are not selling already.
Although, please note that markets change. Always be talking, surveying and validating.
You must have an informed knowledge of your market, know the main players, resellers, distributors, end customers, sales cycles, etc. If you are not yet selling, you still need to have defined an initial pricing and a list of customers ready to test your services.
Once your market has been defined, you must study your strategic positioning compared to your competitors and know your strengths and weaknesses (make sure to know theirs as well).
Be careful, investors will be suspicious of a pitch without any competitor. Either they will consider that you have not done your job and do not know your competitors, or they will think that you simply do not have a market, or that your market is not mature, and that the investment risks are therefore multiplied.
Having competitors should not be seen as a negative, on the contrary. If you have competitors attacking the same market as you, it means that this market has a lot of potential. It also means that you are not alone doing the evangelising if your product or the market is quite innovative.
Finally, you need to think about how you will attack this market: how will you get known and sell your product?
It is the execution of your development plan that will make your success. You must, therefore, have an angle of attack and make yourself known to as many people as possible in your sector.
Master your pitch in all its variations
You must be able to pitch your startup according to the time allowed. The most common pitch formats are 1 minute, 3 minutes, 5 minutes. In some cases, 15-20 minutes and, at a second step, meetings ranging from one to three or four hours. For the later, treat it as a warning sign if investors lock you in a room for 4 hours early in the discussion process and repeatedly. They are wasting more time and growth opportunity than they are bringing value.
You need to know your pitch by heart and be able to adapt it to your audience and each format.
If someone asks you out of the blue, you need to be able to state the following:
We have a [mission] and our [team] is working to see it through. Why? We have discovered an important [problem] that we solve with a [product/solution] built on an incredible [technology] (if relevant). We attack the [market] to sell it to customers, with such advantages over our [competitors]. In the short term, we are working on [improvements/new features/etc] in the coming weeks. In conclusion, this investment is a great opportunity.
Make sure that you always remain in control of your time. Far too many startups fail to finish their pitch in the time allotted and forget to talk about essential points while leaving their audience hungry. Or cover everything by speeding through their talking making it look as bad – and unprofessional – not being able to finish.
Remember to smile and thank your audience at the end of each pitch. This has an effect and people generally remember only your first and last impressions. This will facilitate further discussion.
Create a minimalist and attractive visual support
Once you have written and learned the text, you must prepare a visual aid to accompany your talks. Remember that a good sketch is better than a long speech. Limit the text as much as possible and integrate as many images as possible into your visual support. Your slides must be simple, visual and minimal. It is better to put fewer details on the slides and give more explanations orally or in future documents.
We also advise you to choose a fairly large text size (around 30), so that even the oldest investors in your audience can read your slides. Don’t forget that you will sometimes have to pitch with poor display material or in very large rooms, so be careful with the quality of your slides and the colours used. Once your pitch is finished, have it reviewed (quite a few times) and start practising.
Practise to perfection
To succeed with your pitch, there is no secret: you have to practise, over and over again, until you reach perfection. You will most often pitch alone but you must also be ready to pitch with your team (this is often required by the VCs).
Start by pitching in front of people who know you, where the pressure and stakes are lower. This will allow you to get used to it and gain confidence. Start with your team, friends, acquaintances. Then leverage open stages, competitions, etc. to gain confidence and refine your pitch.
In the end, when it comes to pitching, do find your voice and your style. Take on board criticisms and feedback from educated interlocutors but do always make sure to “translate” it to make it fit your pitch and your style. Do always try to get a recording of each pitch you are delivering. While extremely cringeworthy to watch (for me at least) this offers a massive opportunity for improvement.
Get set, train and get out there, pitch your startup!