How to pitch investors effectively?

One hot topic among entrepreneurs today is to pitch investors. They come up with great ideas, but only one percent land the funding for their business.

“In a single year, the classic general partner in a venture firm is exposed to around 5,000 pitches; decides to look more closely at 600 to 800 of them, and ends up doing between 0 and 2 deals”. – REID HOFFMAN, CEO OF LINKEDIN

If that’s the case, then what makes a pitch irresistible, compelling, and valuable for the investors?

Before you pitch investors, let’s understand what investors look for in a business pitch.

What do investors look for in a business pitch?

RETURN ON INVESTMENT

The chances of getting a return on investment are most often low. That’s why most investors want to know whether your business will give them a 10x return in the next 5-7 years or not. Startups who usually deliver such high returns share common traits.

THE PROBLEM YOU’RE SOLVING

Get clear on the problem your business is solving. Why choose this problem and what makes your product/service unique from other businesses.

LARGE MARKET

Identify the size of the market you’re going for. Investors choose startups which are going after a large market. A large market allows to change course midway and yet come out successful.

GRAND TEAM

Do you have a team who can handle the potential risks of your business? Investors look for experience, skills, and achievements of your team because they are the ones to grow and operate the business.

SOUND BUSINESS MODEL

Business success comes down to marketing. How will you make money? How will you acquire customers? How easily scalable is your business? If you have an idea, method, technique, or process, you should showcase it.

ACHIEVEMENTS

How long have you been in the industry, and what are your past successes? Highlight anything that you have accomplished in the past.

How to do a pitch?

There are many options on how to pitch investors, but which one would the investors find valuable?

Want to learn how to do a pitch? Let’s dig deeper to learn how to pitch ideas to investors.

1. Explain your target audience

You want to get clear on who your ideal customer is because they are the ones to use, like, and pay for your product/service.

Most entrepreneurs do not research who their customer is and fall flat in front of investors. Get well prepared by presenting data, stats, and reviews from your customers. Investors love if you show the customer’s testimonials, reviews, and feedback.

2. Explain your revenue model

Investors invest because they want to make a return on that investment. What any investor will care about is the amount of revenue you generate from the business.

So, inform your investors with revenue model you’re following and how you will make that revenue.

3. Good content creation

Good pitch happens when you create good content and practice great business examples.

Get your team together and write down everything you want to say about your company. Write down possible questions that might come and remove unnecessary topics that you cannot say because of time constraint. It helps you to deliver your pitch with confidence and less error.

4. Practice your business pitch

You have to practice business pitch example several times before you pitch ideas to investors. Present your pitch to a friend or someone who does not know anything about your company.

Do not hesitate to prepare even if you know your business well because it’s going to feel different while presenting in the mass. One best way is to stand up and deliver the talk as if you are presenting to your investors.

5. Tell Stories

It’s great to add stories. Often, investors are given with tons of data and stats, but you can entice your investor by adding some story.

It can be a personal story (why you started this business or what keeps you motivated) or a customer-oriented story (how you solved the issue or what you delivered the customer). Stories grab attention because they are more attractive.

Next tip is to focus more on ‘why you’re doing it’ instead of what you’re doing. As Simon Sinek says,” Start with your why.” Why are you selling the product? Why did you choose this business?

6. Talk about your team

Talk about the achievements of the crucial team. It’s important to talk about your team and their accomplishments because they are the one to operate the company.

Your listeners want to have the confidence that you have a reliable team to back you up. Keep it relevant and include photos of your team members.

7. Practice hard questions

If an investor is interested, he or she will ask more questions. Be ready for these questions. By preparing yourself with tough and persuasive questions, you can demonstrate your skills and abilities in front of investors.

8. Invest in a good design

Make a professional design for your pitch. Great design can portray messages that most words cannot.

Your design style should be not only simple but also consistent across the presentation. Choose the same font type, size, and color for header. You can put elements like diagram, data, images, statistics, quotation, text on the design to communicate better.

9. Address Competition

One common mistake many entrepreneurs make is to say, “I don’t have any competition.” Do this, and your investor will think you’re targetting for a small market.

Everyone has competition. Can’t find one? Do enough research to check who might be your potential competitors.

10. Speak with passion when you pitch ideas to investors

While presenting, be the person you are when you are off stage. You have to have the same passion and enthusiasm as you would when talking to a friend. If you are not passionate about your business, then who else will be?

Talk like you are making a conversation. Retain your style and remain enthusiastic throughout.

11. Show your product

There is so many business pitch example where the entrepreneur doesn’t show their actual product. Even if your product is not yet built, show mock-ups. It’s wonderful to see what a visual representation can do for your product and the overall success of your pitch.

Conclusion

The goal of a successful business pitch is to have investors wanting to invest in your company. You want to pitch investors in a way that makes them running to invest in your business.

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