I recently had the opportunity to network with a number of business counterparts at the Malta Startup Festival organised by Malta Enterprise. The festival had a good vibe to it. Connections were made, pitches were delivered and possibly some deals got struck. This event led me into thinking about how to deliver a really powerful pitch to potential investors.
Reaching investors to raise capital can enable a startup off the ground and take it to the next level. Yet, as it goes with any presentation, one must be persuasive and engaging to grab the audience’s attention. So how can you make your presentation more memorable and convincing? Admittedly, pitching to investors can be a nerve-wracking experience. However, with the right approach and due preparation, you can increase your chances of success.
Investors need to know they are getting a return on their investment so you will need to demonstrate that you have a solid business plan and course of action in terms of how you intend to deliver returns. This includes demonstrating a clear understanding of the business idea, target market, growth strategy, product-market fit, and overall business model. A sound business plan requires market research, sharing of current data and how the business plan will generate revenue. A successful pitch shows investors your proof of concept and instills confidence that they can expect a return on investment.
So how do you ensure you make your pitch comprehensive whilst being concise? Here are 7 best practices that can support you in nailing your pitch:
A business pitch can range from 60 seconds to an hour, which is a limited amount of time to convince someone to invest in your business, so make each moment count by sharing all of the necessary information. Here are some essential elements to include in your pitch: your value proposition, the specific benefits your product offers, your target customers, why your customers should choose you over the competition, and how your product resolves their pain points. If more time is made available you can include additional details such as your target market demographics, competitive landscape, competitive advantage, revenue model, financial projections, sales strategies, team members, exit strategy, and funding needs.
Your pitch deck is a supporting resource that you will refer to during the presentation delivery as well as used in your follow-up communication afterward. It will serve you well to dedicate time for a polished and concise presentation deck. Bear in mind that capital venture (CV) investors receive numerous applications with pitches, so you need to identify a way of standing out within a limited time frame allocated for you. Seek to prepare a deck that is concise yet comprehensive, covering all the essential aspects relevant for this stage. Alongside the introduction of your product/solution, ensure that you include information about your financials, startup equity distribution, business plan, competitor analysis, gained traction, core startup analytics, key metrics, and well-researched facts. Keep in mind that investors are primarily interested in their return on investment, so your pitch has to be solid regarding your business plan and revenue streams.
Various investors have various interests so it is good practice to carry out thorough research on who you will be talking to. Consider whether you are turning to angel investors or to venture capitalists. Evaluate the funding products that fit particular niches. Research what your investors are interested in, their priorities, portfolios, and areas of expertise. A crucial component of a successful pitch is understanding the venture capital ecosystem. What do they prefer? What industries do they typically invest in? Who did they already fund? Knowing the types of companies they tend to invest in can enable you to tailor your pitch and focus on their areas of interest. Also Consider the investors’ background knowledge. Who are these people as individuals? Seek to identify the answers to these questions to understand what they are inclined to go for. Then adjust your pitch presentation and refine your slides based on your audience. When creating your pitch, include information that addresses any possible objections investors might raise. Addressing these concerns early in your pitch presentation will keep potential investors from becoming distracted and shows you’ve performed your due diligence and considered their needs.
Great business pitches are framed around a story. When describing your business, make it a point to show exactly how you stand out from your competitors. You can do this by presenting a real-life scenario in which you describe the pain point a customer faced with your competition and how your product or service resolves this issue. This can enable the investors to engage more with you and your proposal. When you complement your data with a compelling story, you can paint a fuller picture of your business opportunity.
In addition to your business idea and plan of execution, keep in mind that your personality and self-presence are equally important. Research shows that entrepreneurs who project trustworthiness increase their odds of being funded by 10%. Research results also show that interest in a start-up investment is driven less by judgments that the founder is competent than by perceptions about character and trustworthiness. Work on your presentation skills so that you execute confidence as this gives investors the impression that you are in control and can be trusted to execute. Take the time to practice your pitch out loud until you reach a good sense of rhythm and flow in your performance, feeling that you really own it. Also, seek to give your pitch a dose of warmth through conversational improvisation as opposed to an entire formal presentation.
Recap your key points and your value proposition. Wrap the conversation up by stating your call to action. Aim for your main message to stick as you pitch your idea to investors one more time.
Questions or concerns may arise that call your business idea into question. Avoid at all costs falling into a state of defensiveness, which will not benefit your cause. Potential investors may poke holes in your idea to see if it is worth their investment and time. Approach the Q&A part of your pitch with curiosity, listen intensely to the questions you’re asked and be thoughtful in your responses. Make sure that you do not react defensively to critical questions. Instead keep calm, cool and collected. Controlled demeanour is suggestive of strong leadership qualities.
After each pitch meeting, take note of which elements of your presentation worked and which require improvement. Do you need to give some clarity to any of your points or slides? Hone and refine your pitch as you go to make it a continuous process of improved effectiveness. Follow these steps and get ready for showtime!
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