Let’s get real about pitching. Investors will pay attention to your presentation only if they think that it will add value. In fact, you’ve only got the first 30 seconds to tempt them, and the first 15 minutes to prove it to them. This is why some great ideas never attract investors while some half-baked or even fake ones attract millions – something you’ve probably wondered if you’ve been in the funding game for a while.
Because, on pitch day, a great idea won’t matter. How fast can you convey your value in a 45 to a 60-minute meeting? That is what will matter. A great idea badly communicated is disastrous. Therefore, it’s important that you don’t fail before you’ve even started. Investors can smell through the fluff and a lack of focus faster than you can read this sentence. That’s why meticulous preparation on your pitch is essential.
In this article, I will try to explore 7 tips you can use to bait the sharks. If implemented well, you will deliver rapid value in your startup pitch. You will focus only on what’s most important to investors, you will triple your engagement levels, and hopefully, you will triple your investor interest.
1. Write your USP down in 21 words or less
How you articulate your Unique Selling Point (USP) is the foundation of your pitch. Every word you say to investors must converge to it. So, writing it down clearly and succinctly is more important than getting your MVP right (Yes, I just said that!) Because no one’s going to care about your MVP if they don’t know why it’s unique or what problem it solves in a few words.
The most common reason most ideas don’t get sold is that they’re so complex. They leave investors confused. So how do you do it? Simply, answer these three questions in under 21 words each:
- What does my product do?
- What problem does it solve?
- Why is it unique?
Sounds impossible? It probably does. Yet, successful brands managed to do that when they started. That’s what made the difference. Now, if you’re reading this thinking “It’s too hard”, consider investing in a professional to train you on your pitch.
2. Don’t start your pitch with pleasantries
Think about this for a second. The last time you sat through a presentation, you decided if it was worth listening to within the first few seconds. So, don’t start with “Hi, We are glad to be here” OR “Thank you for having us here.” Worse – never start with “My name is…and my colleague’s name is…we are from…” There is a place for these “pleasantries” and it is not at the very beginning of your startup pitch. You can always introduce yourself after your opening lines.
It is critical that you use the opening lines to hook your audience rather than bore them with unessential information. In that sense, begin immediately with the problem you are solving instead of these common “pleasantries.” Your first words must summarize your problem statement and make your audience curious to know what’s going to come next.
Here are a few examples you can use:
- Have you ever gone to a supermarket looking for something, and never found what you wanted? I’m sure, at that moment you hated that you wasted all of that time… What if there was a solution? Presenting to you… “Your App”
- Did you know that the average consumer spends 31% extra per month, just because they are unable to find cheaper options for their essentials? People just don’t have time today to go through multiple stores and compare prices or look for offers. What if that comparison was done for you? Presenting to you… “Your Service”
- 78% of suicides are preventable with the right counselling. The only problem is – people with suicidal thoughts never reach out to counsellors, while their loved ones never suspect depression. But Big data can solve this problem. Presenting… “Your service”
Now, writing a compelling opening has many techniques. The easiest and one of the most effective for a pitch is to ask a question (just like in the examples I’ve given). But with the many ways you can do it, remember to avoid being “boring” and “common”. Be different and engaging from the start.
3. Dress the part and walk in with enthusiasm
The best investors don’t just invest in ideas. They invest in people. Therefore, if you are walking into a startup pitch, how you look and feel is as important as your product. Even if you don’t arrive with the most unique product or service, your investor will look at you as an individual. They will try to see if you, as an individual, have the drive to take a startup to success.
In that premise, your appearance says a lot about you. Your smile says a lot about you too. If you walk in with a nervous frown or no expression at all – the subconscious thought your audience has would be “Why isn’t this person enthusiastic?” In fact, they’ll even question your drive towards your own product or service.
Plus, there’s no entrepreneur who successfully sold a product without dressing up for the occasion. Even Steve Jobs borrowed a suit when he first tried to sell the Apple 2 to investors. Although everyone remembers him as the guy with a black turtleneck, blue jeans and white Nikes – that facade came only after he established the brand.
You can get the suit sorted. But how do you smile when your nerves are killing you? It’s important to practice smiling before walking in front of the audience. The best trick here is to take a bathroom break 5 minutes before the presentation. Look at yourself in the mirror and hold the biggest smile you can for 30 seconds straight. Do these 3 times – you’ll be surprised how you won’t be able to stop smiling after this exercise. So, unless you are Steve Jobs – it’s a good idea to invest in a suit, and plaster a big smile on your face.
4. Before talking about the features – talk about the users
How many times have you seen pitches go straight into talking about how the application or product works? Rather than a sales pitch, it becomes a product demo. But a product demo doesn’t cut it when it comes to selling.
Think about it – nobody buys a Tesla because it uses electricity or how different the driving experience is to other vehicles. No, people buy a Tesla because it’s cool and makes them feel important. Your target when pitching your startup is to move your audience emotionally. And, the best way to do this is to introduce a story of existing users who love your product.
Therefore, right after your opening, you must answer these questions with a story:
- What are your current customers saying?
- How does this product change your life?
- Why do people buy your product?
This is something that early entrepreneurs often miss. But it adds tremendous value to your pitch. So, keep your application’s features for the latter half of the presentation. Use the first 30% of your presentation to talk about existing customers and how much they love you.
5. Plan to use just 1 slide every 4 minutes
Yes, you read that right. If you need 10 slides to explain your product to investors within a 20-minute presentation slot – you are walking into failure. I’ve seen presenters come in with too many slides, and end up having no time to get to the important stuff. When they realize that time is running out, they skim through a few slides to get to the end (Why did you even have them in the first place?).
This looks completely unprofessional. Don’t be that person. The last thing you want to show is that you are unprepared and unfocused. Like I mentioned earlier, investors invest in people – and the impression you create counts. For a 1 hour meeting with your investors – stick to delivering an epic 20-minute startup pitch. For that, use a maximum of 5 slides. More than that and you’ll distract them, or even run out of time for Q&A, which is extremely important for your startup pitch.
By sticking to this rule, you can make your pitch crystal clear, and to the point. Review and re-review until you condense your pitch to the bare essentials. This will make you sound extremely professional and convincing.
6. Be prepared with the following FAQs
Your investors will ask you the following questions about your startup. Prepare for them, and answer them before they are asked. This will leave the balance 40 minutes of your meeting for Q&A – where the investors can focus on deeper questions. They’ll appreciate you for this.
- How does your business make money?
- What’s your cost of operation and/or production right now? How does that look as you grow?
- What’s your profit margin?
- How much money are you planning to raise?
- What will you spend this money for? (or Why do you need this money?)
- How long will you take to return a profit to the investors?
- How many users, customers or clients will it take until you return a profit?
Proactively answering these questions will show investors that you are business savvy, and that is impressive. It’s a rare find when an entrepreneur is great at product development, sales and finance.
7. Let only one person present the pitch
It takes a lot of chemistry and practice for 2 or 3 people to walk in and deliver a compelling pitch together in 20 minutes. But, as entrepreneurs, you don’t have the time to invest in developing this chemistry. That time is better spent on developing the product or selling.
It is alright to take your team in to answer any questions from investors. But it isn’t ok to divide your presentation into chunks delivered by several people. If you have been doing this before, avoid it like the coronavirus. It ruins the complete presentation. All you need is one person who can command the audience to deliver a compelling presentation about your startup. Decide who that is and stick to that one person.
Can I do everything right and still fail?
You’re never going to have the perfect startup pitch ready for investors. There can be many reasons why your pitch may not work even if you did everything right. Ultimately what matters is that you leave a great impression in them. Even if you don’t succeed in your first startup pitch, you want them to remember you the next time you arrive.