Entrepreneurs are generally confident people, and yet most confess to experiencing tremendous anxiety when it comes to pitching investors. Standing in front of a group of people who can make or break your company and asking them to invest money in your business is an intimidating prospect.
How do you start your deck? How long should you present? What kinds of details do you need to include? How do you make a good impression?
Well, who better to give advice than the very people you'll be pitching? These 5 serial entrepreneurs and veteran investors outline what you should and shouldn't do when pitching your business:
Chris Sacca, veteran VC
DO talk about why you are uniquely qualified to follow through on your business idea. What experience or expertise do you have that gives you an advantage over everyone else? What sets you apart from your competitors?
DO instill FOMO: "fear of missing out." Most investors have passed up an opportunity that later went on to be profitable, so make them worry they’ll regret it if they pass you up.
DO talk endgame. Investors want to know what your plan is for acquisition, ideally in 3-5 years’ time. Give an example of a company that would consider your business an attractive acquisition.
DON'T ramble. Keep your pitch short, simple, and specific. You should have a 2-minute version of your pitch that conveys your basic business model, your "unfair advantage," and an exact funding target. You're not trying to raise "between $1.5 - 2 million." You're raising “$1.8 million.”
Brian Cohen, Chairman of The New York Angels
DO talk about your financial plan. What's your main revenue stream? Discuss why the problem you've identified is profitable, why your solution is viable, and how you're going to make money.
DO discuss the market trends that are driving your product. Investors are curious people and want to stay on top of the latest, so satisfy that curiosity and make a good impression by teaching them something new.
DON'T be vague when discussing how the investment will be spent. What are you raising money to do, exactly? And why now?
Chance Barnett, CEO of Crowdfunder
DO find someone in your network who can introduce you to investors (ideally someone with a strong reputation). Send whomever you’re asking to make the introduction a short email blurb with suggested language and a link to your online profile, so they can easily forward it along.
DON'T present a series of bullet points. Tell a story instead. Barnett advises all pitches follow this general format: “There is a huge opportunity to do X as a giant business. We’ve cracked the code, and this is how my company is doing it and will dominate this market. Here’s who myself and my team are, and why we’re the only people to back in this space. It’s working, and now we need money for X and Y to grow.”
Reid Hoffman, LinkedIn co-founder and venture capitalist
DO research the investors you're pitching. What businesses have they backed in the past? If you know what they’re interested in, you can tailor your presentation to give them the info they want.
DO remember it’s more important for the right people to say yes than for everyone to say yes. Investors can offer more than just money — they can be valuable advisors too. So pay attention to potential investors who are asking interesting questions and are excited about your product, market, and the problem you’re trying to solve.
DO show, don’t tell. Instead of saying you understand your customers needs, provide quotes from credible customers. Avoid superfluous adjectives and adverbs like “very.” Hoffman says these words act like a poker tell, signifying points you’re most nervous or unsure about, and that he's more likely to ask probing questions about those key points. So be specific and straightforward.
DON’T shy away from areas that are problematic or risky to your business. Just because you don’t address them, doesn’t mean investors won’t see them. And by showing you've already identified and understand potential concerns, you’re building confidence instead of instilling doubt.
DON'T end with a generic "Q&A" slide. End with your most important slide, something that you want on screen while you’re answering questions that will linger in investors minds long after the meeting’s over.
David Rose, serial entrepreneur & angel investor
DO keep it short. Angel pitches should be 15 mins; VC meetings less than half an hour.
DO show your integrity, passion, and conviction to succeed no matter what. Investors are backing YOU first and foremost.
DO prepare a handout with more detailed information on your business. Just remember: your presentation is not your handout. Your handout should stand alone without you, and give investors the chance to deep dive into what you’ve presented.
DON’T read your speech or stare at the screen. You’re trying to connect with investors, not your PowerPoint slides. So make eye contact, pay attention to your body language, and follow good presentation practices.
Are you ready for your pitch?
Follow these tips to ace your pitch and impress investors. And remember, VCs and angels aren't the only source of startup funding. Check out this infographic for 5 other ways to raise money for your business.
Sources: Ted.com, ReidHoffman.org, Forbes.com, Business News Daily, This American Life