People like what they understand. That means when a founder makes an elevator pitch to an investor, the first essential need is to explain the basics of your business in very straightforward terms. What do you solve, and how do you solve it?
Yet when I talk to investors, they often tell me, “The biggest start-up pitch failing is not being able to explain what they do.”
Here are some ways to break through the barrier of understanding and build a platform for a deeper conversation.
Save yourself 30 per cent of prep time
Don’t open PowerPoint! At least, not until you know what you’re going to say. Use Post-Its or The Pitch Canvas to brainstorm your pitch, so you can get your thoughts about what you might pitch out of your head. Select the key topics and messages, and build your storyline from there.
Once you’ve got a Post-It prototype of your pitch, creating slides to support the story will be so much easier. Separating the process of deciding the storyline and creating slides will save you hours of wasted time.
Tune to the audience and your objective
Whoever you’re pitching to, take time to learn something about your audience. What is the person you’re pitching to like? What’s on their mind? Go to their LinkedIn page – see what they comment on, what they post about. Check them on YouTube, Instagram or Twitter. Those insights will help you steer your pitch to resonate with their interests.
Be clear in advance what you want to get out of the pitch. Are you raising now? Laying the ground for a round early next year? Need introductions in the industry?
Tuning in to the audience and being clear about your objective seem obvious first steps – but most people start straight away on the slides.
Get straight into the good stuff
Don’t spend too much time on history: they want to know what you do, and what you solve. They’re not so interested in your timeline, your first seed funding three years ago and your MVP launch two years ago. Give them the best you’ve got in the first minutes. Which massive problem are you solving? How much time, money, frustration, waste is it causing every day, or every year? What do you do to save that cost, time or irritation? Have you made any progress?
Investors are looking for opportunities – tell them about the opportunity you are handing them, not just what you do.
The pain is the why of the product
In the words of Simon Sinek: “Start with Why.” And the ‘why’ of your product is the problem you solve. What is happening today without your solution? How many people or organisations are struggling with this problem? How much energy is lost, or inefficiency is created?
It’s also an opportunity to give one marker for the size of the market. In a short pitch, it’s not at the TAM, SAM, SOM level – it’s about giving one or two quick indicators of how many people/organisations/animals/you-name-it are struggling with this problem, and what might be a high level related value.
If you say, “Parking’s difficult: we built an app for that,” or, “A lot of time is wasted with this process,” it’s a general story. Our cynical brains ask the question: Really? How difficult? How much time? Being specific about your statements helps build credibility – for you, and the case you’re making. For example: “On average, it takes drivers over 20 minutes every day to find a parking space in big cities,” is a statement that’s more likely to bring your audience along with you.
Putting a number on problems also gives you an opportunity to show the result of your solution. You’ll be able to say, “With our solution, you find a parking space in two minutes, not 20.”
We need to share a lot of rational information in the pitch. But we also need some non-rational messaging. Talking about what you find cool, or fascinating, or exciting about your business can help you become more animated and expressive. Simply being happy to have the opportunity to share your story – instead of seeing the pitch as some kind of threat – can help you connect on a human level. Don’t underestimate this – your enthusiasm really counts.
Have a planned opening
Decide what you are going to say from the first word. It’s the moment of maximum stress, which means if we don’t have a concrete plan for what to say, there is a chance that you’ll ramble, and say things you don’t mean to say.
Instead, decide what your first few sentences will be – and practise them like crazy. That will enable you to succeed at the beginning, which will help bring your adrenaline and temperature down. It also communicates to your audience that you took the pitch seriously and prepared solidly to make the best of their time.
Be open to feedback
When you’re in the discussion with investors, they will give you critical feedback. Stand up for your vision, but don’t fight every battle. If they have valid input, where you could take steps to improve, then accept it graciously and tell them you’ll work on that.
Investors want founders with vision and confidence – and they want you to be open to their advice, to be coachable. It’s a tough tightrope to walk, but it’s part of the process of raising money.
Don’t give up!
Investors see hundreds (even thousands) of pitches per year, and their job is to say ‘No’ over 99 per cent of the time – because most make five to seven investments per year. Keep going! Rejection is a part of the journey, and almost every funded start-up I have ever spoken to has received numerous rejections on the way.
If they say no, take their feedback – act on it – and give them a call a few months later. Investors love it if you say, “You gave us valuable advice a few months ago, and we’ve worked on it. Can we give you an update?” Almost always, they’ll say, “Yes!”
David Beckett of Best 3 Minutes is an international pitch coach, who has trained over 2,000 start-ups and scale-ups. David is the creator of The Pitch Canvas and author of books Pitch To Win and Blue Moon Pitch.
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