Pitching to investors can be tough and nerve-wracking, here's a quick guide to help founders prepare.
So, you’ve got your start-up off the ground and the first couple of months have gone well. Congrats, the easy bit is done and you can now look forward to one of the most challenging, and rewarding, experiences of your life. One of the biggest challenges founders face is raising finance. Not all great ideas will get funded and more surprisingly, a lot of bad ideas just may.
Keep your deck short and to the point:
You’ve got about one minute to get investors interested and if you get their attention you only have around 15 minutes of their attention time left to impress enough to seal the deal. Okay, maybe not seal the deal, but you’ve got a short window to get them to the point that they want to hear more and are willing to engage and ask questions.
How does this translate into your deck? Follow the guides for giving a TED talk. One slide per minute to minute and a half of talking. Don’t put everything you are going to say in words on the pitch - instead, use imagery and only highlight key stats where needed.
Start with something incredibly exciting and make sure you end on a similar note.
Keep your projections in check:
Hockey stick growth is like unicorns, very few actually exist. Investors want to see that you will be growing but, if you can provide realistic growth metrics, and the data/plan that will support your belief for achieving that growth, you’ll be in a much better position than if you’d stuck up a hockey stick looking growth chart.
State facts, not alternatives:
A good investor will do their homework on you and would love nothing more than a reason to not invest. Make sure you stick to the facts when you discuss not just your product, but also on your and your teams CV. Don’t exaggerate any of your personal achievements as it could back to haunt you during your pitch.
Know your competitors as well as you know your own business:
In case you didn’t know it, you have competition. You are not the only one doing what you do. Sorry to burst your bubble. Even if, in the off chance, you are unique, you are a substitute for something else. You need to know everything about your competition, or what it is you are substituting. Your investors are going to want to know why you can beat them and if your answer is less than 140 characters, you’re not going to pass the test.
Most companies have competition so don’t worry. Just know how you are going to be at least nine times better than them. According to research at Harvard a new challenger must be nine times better than an incumbent product or service in order to get users to switch.
When it comes to investors, do your homework:
Take the time to research potential investors. What does their portfolio look like? What industries do they invest in? At what stage do they invest? Do they have anything in their portfolio which is very similar to what you do? If they don’t invest in your industry, or don’t invest in your stage, or have something in their portfolio very similar to what you do, give them a miss for now.
Practice, Practice, Practice:
You need to be ready for whatever question may get asked so the best thing you can do is practice your pitch in front of people you can trust to give you honest advice, and ask the hard questions.
You’re going to get hammered on your experience - what makes you and your team the right team to deliver this product or service? You’re going to get drilled on your financials - how exactly are you going to increase sales from 100-200 million in year three?
You will get grilled on your competition - given the advice above, you will be prepared.
Use the above as a guideline for preparing for your pitch to investors and you’ll give yourself a good chance of at least being heard. Good luck and if you are interested in chatting more, leave a comment, check out SyndicateRoom, and we can talk.