10 Tips for a Successful Entrepreneurial Pitch

Successful entrepreneurs know that pitching to investors is crucial for raising capital. If you want to make a compelling pitch, it’s going to take more than just a deck full of numbers and graphs.

In this post we explore 10 tips for making an innovative, investable pitch that will get the attention of venture capitalists and angel investors.

This post will help you avoid common mistakes such as getting caught up in your own excitement or focusing too much on company size rather than investor appetite. It covers how to create an overall investment strategy as well as how to design each slide in your deck accordingly. There are ways to maximise your pitch and ways to avoid pitfalls that you shouldn't be falling into. If a pitch goes wrong it is often the result of a combination of these factors.

GUT FEELING

Often startups that succeed have something in common: they have a gregarious leader, who can evoke excitement in others, and are required to quote Goethe or Emerson during their public appearances. An optimistic attitude and a sense of humour are often key. There can be no doubt that the dream of starting a successful business is more than enough motivation for any person, but many start-ups seem to feel compelled to share the enthusiasm with others.

Jared Polis, founder of internet technology business bluemint.com, has said: “Entrepreneurs are optimists. We were told no – we have a passion to prove there is a better way.”

Imagine pitching to a team of people who have the power to invest in your idea and give it wings. They are looking for something that will inspire them and they want to trust your ability to execute. Inspiration is easy; execution is hard. And that’s what you need them to back, not someone who promises an exciting idea but can’t deliver on it.

TIP: The group you are pitching to has a lot of experience, and they want to know that you have thought about them, the business and your plans for the future. Be ready for anything.

HOW TO MAKE A PITCH

Pitching is similar to dating: initial attraction is crucial. When it comes to wooing investors, entrepreneurs should be aware of their strengths and weaknesses when pitching. Some do it better than others; some do it in a more memorable way than others.

1 Know your audience

Investors are looking for opportunities in specific industries (such as energy or clean tech) or sectors (for example biotech). Some investors have a preference for investing in a certain type of business (for example, they like to invest in food or healthcare). They are looking for opportunities that are well positioned, have a good idea and one that is sustainable. They want to see your plan and what you will be doing with the money.

2 Be ready for anything

It is impossible for all stages of the fundraising process to run smoothly, so preparation is key. If you do not prepare well then don’t expect investors to be able to help you out.

3 Create an overall investment strategy: if you don't know where you want your company to be within three years then it’s not a good idea for any investor.

4 Know your numbers, know your competition

If you have a high revenue growth, be prepared to discuss it. If you are not profitable, don’t be surprised if you are out of the game because financials are crucial.

5 Be ready for a knock back or two; if the first investor says no then there will be another one. Offer them something different and something special that they couldn't find anywhere else.

6 Create a pitch that doesn't go on too long

Your deck should be no more than 15–20 slides. Remember, they want to get to know you as well as your company, so you can’t just focus on the numbers. Focus on having a few slides that are powerful and make an impact.

7 Be prepared; work with other companies in the same industry and ask them how they pitch their business.

8 Pitch your business exactly how you would explain it to a family member – use simple language and show examples with charts or graphs that make sense to investors.

9 Make sure your presentation is very easy to understand and is not too long or complicated. Slides should be simple.

10 When you pitch, focus on the numbers and your vision

Investors want to see what you have created and how it will turn a profit. They will most likely be interested in your pricing model because there are a lot of models out there. There are many ways to charge for services, so make sure to present the one that is most suitable for your business model and that investors like.

TIP: Focus on the numbers! They are your best way of demonstrating valuation so make sure you do this properly as well as being able to explain its value in a way that is understandable by investors. Pitch investors as if they were your family and friends – then they will be more likely to trust you and invest.

WHAT DO INVESTORS WANT TO HEAR?

Investors want to hear about the management team, the team that is going to execute this plan, how long it will take to build it, where there is opportunity for growth, and where are the risks involved.

If you have a technology then highlight exactly what the problems are and how you are going to solve them. Investors should also hear about alternatives so that they know there is competition out there but also from vendors who can also provide similar services. The investor wants to hear that your business model has an advantage over competitors’ models.

Investors want to know what the potential exit strategy is and how easy it is likely to be. For example, if you have a great idea then they will want to know what stage it is at and also if there are any patent or IP issues.

When presenting your plan, investors should not see anything that looks like a financial model; you are pitching an idea, so focus on showing the impact of the funding combined with their contribution and how you intend to invest it.

Investors should be able to see exactly what you have done, how much time (and money) has been invested in it so far and be convinced that there is more than just an idea.

Conclusion

It is a numbers game. Investors want to know that if they invest it in your business, how much will they make from it? And how soon?

They are looking for an exit plan and how easy it is going to be for them to get their money back. Some investors will want the company to go public and have the stock listed on a stock exchange, while others will prefer to sell part of their stake or take the company private. There are many different scenarios that may arise so potential entrepreneurs should make sure they choose their investors carefully, because they will have a big impact on your future success.