HOW TO PITCH TO INVESTORS
Introduction: Pitching to investors is a hot topic nowadays. Often people would create a solid backbone and just pitch it to the right audience with the right money and boom, that’s the way to getting your money’s worth of ideas, right? Not anymore.
THERE IS NO RIGHT OR WRONG, THERE IS ONLY LEARNING FROM REJECTION OR WINNING OVER THE INVESTORS.
According to Forbes for pitching, you need to know your whys more than anything. Why is that important? People often forget that to solve a problem you constantly need to ask yourself why is that problem even an issue to be resolved? In the case of pitching you need to do your homework.
Homework means looking at it from the investor's eye of investing but asking yourself who are you seeking to raise money for your Startup? What will it do for you? What will it mean for your venture? ASK YOURSELF THESE QUESTION BUT REMEMBER AS AN INVESTOR THINK OF WHAT TYPE OF ANSWERS WOULD YOU WANT TO HEAR AS AN INVESTOR. (Think of this also during the preliminary stage of planning of what you would you say in your pitch).
Remember the investor will be definitely looking for (long term growth strategies, short term growth strategies, the amount of capital you’re asking for [could be all sorts of capitalàbut leads to money in the long term and short term], what is your exit plan? what do you hope to gain once you reach both your short-term and long-term goals? They look for genuine answers rather than fix-ups or answers that could just please them and not hold any sort of accountable value. In short, always think of how you will answer their questions based on the management of capital and keep the answers genuine at all costs.
Did you know that 100 investments investors will only help 10 investments/start-ups go big? Always know that pitching means that you will have to produce 1000 investor pitches. Statistically, the odds for success are not great. You can beat the statistics, however, by crafting a pitch that turns heads and gets funded.
Timing is critical. The less time your pitch takes, the better. A brilliant idea means nothing unless you can distill it to a few moments of sheer power. If you say something will take you certain minutes, then make sure that you take a minute or so lesser than you would. If you are told that you only have certain minutes to pitch, then take at least five minutes or less. If you say one last thing then make sure that that thing is the last thing. Staying true to your word and firm in timing shows investors that you are a visionary who can manage resources well like you are to manage the investor relations. Move at a good pace don’t rush at the end. If you’re using a slide, then don’t get stuck on one slide for more than three minutes. Here is the key secret to following the ten-minute rule; if investors are interested you save them time and if they are not then you save yourself time as well.
Your pitch should turn into a story that can resonate with the investors. In one of his most famous speeches, Steve Jobs stated “I had no idea what I wanted to do with my life and no idea how college was going to help me figure it out. So, I decided to drop out and trust that it would all work out OK. It was pretty scary at the time but looking back it was one of the best decisions I ever made.” And this was at one of his famous speeches for the commencement of Stanford University. We need to consider that context matters, so look at investor background and begin to resonate with them by building a story possibly around their lives as such and that will help you cultivate a sense of personal connection with your investors. Like the students at the commencement speech related to that tiny bit of Steve Jobs own college story life, this means that there are stories that can resonate within a room of pitching to investors.
QUICK SUMMARY OF KEY POINTS DISCUSSED:
1. To pitch to investors you need to keep in mind that doing your homework in terms of knowing your product, knowing the market, knowing the investor matters the most.
2. Always keep in mind your long term and short-term growth strategies in mind and try to position those from investors view while keeping in mind it is your job to remain genuine to your product.
3. Always ensure that you connect with the investor on a personal level as well no matter if it’s a shark or an angel. It is always a good step to building a relationship with all investors, after all, they are the fuel to your machine’s growth.
QUICK TIPS ON PREPARING YOURSELF ON WHAT TO SPEAK ABOUT:
You also need to be aware of the type of investor you are dealing with, whether it’s a shark who requires ROI or an angel looks for an ROI on some sort of social capital. Always know that angel Investors invest in their entrepreneur and not the business plan. You must be able to connect at a personal level with the investor. Angels care more about the presentation and the entrepreneur than the business plan. Present in less than five minutes. Under five minutes means presenting the project and explaining what it entails for the investors under five minutes. Always keep in mind that you should negotiate a term sheet offer.
All one needs to do is wrap their heads around timing and execution of a successful pitch if that can be negotiated and well done then there should be no cause of alarm. With keeping in mind that investors will be very likely to resonate with your message. There are many differences in types of Investors that you may come across but they all look for one thing and that is the entrepreneur personality that one possesses. They want to see heart, passion and the right mind that is focused on providing society a valuable product that helps eliminate a problem and become an avid solution in the end.