Being able to deliver a successful pitch can be quite a nerve-wracking and uncertain challenge. As entrepreneurs, startup founders need to make their startup ideas appear legitimate and real in order to secure the necessary funding. Meanwhile, the investors have to take everything into consideration and check if ideas are feasible and predict their earning potential. Hence a huge responsibility is on both’s, startup founders and investors, shoulders.
According to Neil Patel, there are some steps every startup founder must master before pitching in front of an investor:
- Preparing the elevator pitch
- Researching and getting to know the audience
- Using realistic data
- Mastering an engaging story
- Creating a documented succession plan
- Preparing for a good first impression or Dress to impress
- Knowing the startup revenue model
Yes, first impressions are important. Yes, mastering an elevator pitch is essential. Yes, using storytelling helps. Putting the product first might be the instinctual idea to begin with, but not necessarily the best idea.
When pitching to an investor, the investor must be put in the center of the process of creating a pitch. How so?
Do your research. It is crucial for an entrepreneur to know before-hand some aspects. Is the investor interested to invest in the industry your startup is activating? Is the investor interested to invest in the region your startup is offering services in? Is the investor interested to invest in the stage your startup is at the moment?
There are 3 tips startup founders should keep in mind when preparing to pitch their ideas or products in front of investors, according to Alicia Syrett, CEO of Pantegrion Capital:
- Don’t be too salesy
- Don’t say there is no competition
- Give them an investment pitch, not a product pitch
Being pushy and using the approach of a salesman will not work. Usually, when something sounds too good to be true, it probably is. And investors know when an idea is not worth investing in. Moreover, character and personality matter. If there is no click between the entrepreneur and the investor, the investor more probably will say no to the pitch. There needs to be a long relationship between both so it is important for them to resonate with one another.
In the world we are living today, there is always competition. And the most time from where we expect less.
When pitching, it’s important for startup founders to focus on what the investor can get from investing in his/her startup. It’s essential to know the startup’s numbers: the financial status, the revenue, gross market, metrics, and profitability. And more important, focus less on the investor’s money and more, again, on what your startup can offer based on the initial clients and partnership which can prove the evolution of the startup.
Finally, don’t forget the importance of… timing. The pitch might be on point, but the timing might not be the right one. So if it doesn’t work it’s not really on you. All that remains to do is to try again and improve your pitch every time.