Pitching to an investor means presenting your business to venture capitalists and angel investors to secure investment funding, usually in exchange for some percentage of equity and business partnership. Every entrepreneur needs to know how to sell their business idea to be able to get funding grants from investors. To do this, you need to build a great product first and this begins with having a solid business plan handy. A business plan will serve as a roadmap to putting your business out there.
A pitch lasts for a few short minutes usually 10-12 minutes but the results could influence the entire history of your company, so it is important to make good use of every pitching opportunity.
There are three phases an investor pitch is divided into:
Before the pitch
- Rehearse your pitch extensively and set a time limit for yourself while doing so. This is to familiarize yourself with your presentation, slides progression and to highlight all the key words to say beforehand.
- If you have a team, then delegate tasks to every member of the team. Do not try to do everything by yourself. Let everyone pitch in their ideas and contributions however little it may impact the overall project. Besides, doing this builds a great team bind which is what investors like to see in a team.
- Conduct thorough background checks on the investors you would be presenting to. Know their peculiar preferences, dislikes and histories. Doing this will help you craft a presentation they can easily relate to.
During the pitch
- Wear confidence like a cloak: While speaking, you need to be conscious of certain things which may seem trivial but actually carry much weight to an investor. Things like time management.
Take care to structure your presentation to fit the time frame allotted to you. Investors are usually very busy people, and therefore, they take their time very seriously. Do not try to speak beyond the number of minutes you are given, this shows that you place value on their time as much as they do.
Another point to note is your body language and nonverbal expressions. You want to appear confident and in control not arrogant, bossy, or unnecessarily proud. When talking about how your product is better than that of your competitors, don’t try to defame them or their product. Instead be courteous in stating your unique value proposition, as well as your achievement with the market so far. Even when pointing out deficiencies of your competitors, do so without coming off as someone with an underlying motive.
Lastly, talk like you know what you’re doing because in essence, you actually know what you are doing. Speak clearly and audibly, using appropriate gesticulations where necessary.
- Relax: Especially in the Q&A session, don’t be scared to answer any question you are truly uncertain of its right answer with an ‘I don’t know this right now but I’ll definitely figure it out (give a specific time), and get back to you’. This is better than giving false figures or worse, making random guesses.
However, don’t be too quick to admit ignorance over everything, you should be well prepared before coming especially with your data, in relatable facts and figures. You are human and therefore not expected to know everything nevertheless, there are key things about your business you should be well versed in before standing in front of any potential investor. Things like total market share for your product in plain figures, sales forecast and other vital information that will help an investor determine the viability of your business.
After the pitch
- Anticipate questions and answer them in advance: After your presentation, the audience will most certainly have questions about your business. Prepare for this section by providing answers to every possible line of questioning before coming to pitch.
- Follow up: The ultimate goal of a pitch is to leave a strong impression about your business on the investors so much that they can put their money into it. Notwithstanding if the money doesn’t come immediately, there is still the option of follow-up. Follow up is best done by supplying your contact information and carefully crafted business plan at the end of a pitch.
- Work on feedback and keep tweaking your product: Take note of feedback suggestions and recommendations from your audience and use them to further develop your product, even if all you got from the pitch was a rejection. Keep refining, keep remodeling your final product and continue to put your business out to potential investors.
Bulletproof tips to nail an investor pitch
Here are tips to nail investor pitch:
1. Create a solid pitch deck
A powerful presentation begins with quality pitch cards. A pitch deck contains detailed information about your business in a summarized format, usually in slides.
When preparing a pitch deck, ensure to make it legible, easily understandable, use clear graphics that highlight key information that all in one glance. Apply simple texts on light background so that your presentation can be readable from a distance.
2. Use compelling stories
Always tell emotional stories to buttress your problem statement and highlight how your product is the perfect solution. Remember, people relate more with what they can identify with, so try to present your business using storytelling.
However, the stories told should not be so ambiguous or unbelievable that your audience finds it hard to connect with your product. The goal is not to deceive but to introduce practicality into your pitch.
3. Outline clearly your business model, team, and financial information
No one wants to make a bad investment and the same is true for Investors. They want to know what’s in it for them. Take care to spell out exactly how you plan to make money from your business, who your target customers are, are the payers also the users, what extra features have you provided for extra fees, what are your prices ranges, and other such information.
Furthermore, show on a slide your team cooperation. Highlight the diversity and uniqueness of each team member, such as the skills, experiences of each individual. Give people responsibilities that show how balanced your team is.
For instance, if your business is technology inclined like mobile apps creation, your team could include app developers, project managers, programmers, marketers, editors, and content creators.
Having such a team means that certain production costs especially for hiring human resources will be greatly reduced and this becomes an advantage to the team.
Spend time explaining your financial information in details but be conservative about your financial projections. While it is vital to show an investor how much you can achieve in a year, it is even more important to apply caution by not over or underestimating any figure.
4. Provide authentic data
Have tangible evidence as backup, don’t say what you cannot prove just to get a deal. For example, saying that you are already making sales to millions when in reality, just a handful of people are testing your product. s
5. ‘Show not tell’
When pitching to an investor, a common rule of thumb is to not show what you can tell and don’t tell what you can show. In essence, you don’t need to do all the talking yourself; sometimes, allow the weight of related facts make the emphasis you wish to make. Paint a scenario that highlights the problem sufficiently.
For example, saying ‘X million Nigerians lack basic healthcare and die as a result of acute malaria annually’, is more effective than just saying ‘Nigerians do not have access to healthcare facilities and are dying from malaria’.
6. Highlight competitive advantage
Your unique value proposition is what makes you different from the crowd, put it clear to investors that yours is a viable and sustainable business.
You also want to show that your business is innovative in adapting to new trends in your industry.