Crafting the perfect pitch is a skill that many founders want, but struggle to develop. And with the countless resources and differing opinions on how to pitch your company, it can make the task all the more complicated. In this syndicated post, startup expert Ron Flavin (who's also co-directing the San Francisco Founder Institute) gets right to the point outlines the key components you need to create a memorable startup pitch that will make investors fall in love with your company.
The article, "How to Pitch Investors: 13 Key Elements of a Powerful Pitch", originally appeared at rflavin.com and has been republished below with permission.
Nearly all founders want to learn how to pitch investors to get funded. Pitching to investors is both a science and an art. You need to deliver the right information in the right manner. And while every investor is different, there is a way to deliver pitches that are compelling, tempting, and will get you to the next step in the startup funding process.
Here are 13 key elements that when incorporated into your pitch, can spell the difference between a million dollars and none. This is how to pitch investors like a pro.
- Do not go beyond 10 minutes: Crunch your ideas to deliver a short but impacting deck. If they are truly interested in your proposition, they’ll ask you to stay for questions.
- Tell a story: While you flash numbers and diagrams on your slides, provide more meat by narrating the story behind your startup. Be sincere, and be true. Nobody forgets a good story.
- Stay on track: Make a mental note of the things you need to tell them, and stick with it. Their time is important, and thus you need to focus on the core details. Keep them hanging so they ask questions afterwards.
- Paint a clear, accurate picture of your product or service: Remember that humans understand a concept more fully if they are able to use their senses. If you can bring a sample of your product or let them try your service, the better.
- Explain your unique value proposition: You have to let them know that you are making a difference with your startup. Investors get a lot of proposals, so an idea that is similar to another startup won’t get you anywhere.
- Accurately describe a clearly defined target audience: Investors need to know that you are targeting a real market, and that these customers are just waiting for your product or service. Clearly define the specific customers you are targeting. Back it up with credible data and visuals to get the point across. Never use terms like “our customers are everyone” or similarly vague descriptions.
- Explain your customer acquisition plan: Walk your investors through a quick but comprehensive overview of your marketing initiatives. Take advantage of digital marketing and give them solid plans about how you intend to immerse your product or service into the market.
- Explain your revenue model: Share with your investors your rationale for the revenue model you selected. At the end of the pitch, you owe your investors an answer to this question: “How will this business make money?”
- Brim with enthusiasm: You can never fake passion. Be proud of what you have achieved so far, and let your investors see it. They can only put their trust in your startup only after seeing you put yours in it. Always be confident, never be cocky or arrogant.
- Dress for the occasion: If you really want to learn how to pitch investors, remember that first impressions are important. Dress appropriately for your audience and always be professional.
- Practice your pitch: Practice, practice, practice and practice some more until your pitch rolls off your tongue in a smooth and natural flow.
- Anticipate and answer questions: A good pitch entails more questioning from the investors. Be prepared with a list of possible questions, and have them answered ahead of time. As you encounter similar questions, learn to answer them implicitly the next time you do your pitch. Have friends or colleagues play “Devil’s Advocate” so you can anticipate potential investor questions.
- Show them a future state: Investors typically are looking to exit within a five-to-seven-year time frame. They need to be able to see something significant by that time. If you tell them that the startup is still not getting break-even on Year 5, you need to rethink your business altogether.
The 13 tips above outline how to pitch investors to achieve your ultimate goal of getting funded. But remember, the real goal of your pitch meeting is to keep the investor interested and to get another meeting. Securing funding for your startup is never easy and takes time. You will need to be prepared to meet investors, pitch them, meet them again, continue pitching and repeat the process over and over until you close in and get the funding you need.
There are lots of great resources for building a strong pitch but if you really want to learn how to pitch investors, the best approach is to either practice in real-life or join a strong program.
If you are interested in real-life pitch opportunities, do a search for “Pitch Competitions” in your area. If you’re in the Bay Area (California), you can check out monthly pitch events such as Pitch Force, Elevator Pitch or One Pitch, hosted by OnePieceWork. And wherever you are around the globe, you can also look at accelerator programs such as the world-renowned Founder Institute, an intensive 3-month accelerator program.