The charm of entrepreneurship has driven a lot of individuals to start their own business. There was a time when just a great idea was enough to compel a veteran investor to open his/her pocket to support the ‘next big thing’. The time and things are so different now! With the decrease in the entry barrier, there is a drastic increase in the expectations of an investor for the ideas they invest in. Startups are competing for funding and it is much more difficult to catch the eyes of an angel investor. Here’s something all startup founders should know when speaking to an investor - You’ve got just 30 seconds of their time. So in this half minutes, you can impress them with your idea, or you can forget it. The first impression counts the most as all it takes is the strategy and passion.
It has been seen that there is a huge gap between what an entrepreneur perceives to be important versus what investors really value. A lot of people have suggested the ‘30-3-30 formula’. As per this you get 30 seconds to nail your pitch and if the investor likes it, you get another 3 minutes to make them understand the opportunity based on which you get the 30 minute face-to-face meeting. Your pitch plays the most important role in communicating the incredible ideas and finding the right investor. For founders with sales DNA, communicating the pitch comes naturally, but for a lot of startups with may be technical/ non-sales experience, understanding and communicating the pitching becomes difficult. As a CEO, your main job is selling. Recruiting, fundraising, getting your first customers, partners, etc. all are sub-parts of selling. By understanding a few core aspects of how pitch presentations are received by investors, as an entrepreneur, it increases your chances of getting a great investing partner.
The way how you put the facts and data together to sell a vision. When investors understand and believe in you and your vision, it increases the value of what you’re selling. The communication should be such that your audience feels that they’ve heard the vision and evidence, and have come to their own conclusion that this is a winning idea and team.
Your pitch should be tailored to your strengths as a business. You can build it around your team, your unique insights, your product, etc. The key is to identify your strengths and build your story around that.
Have statistics on what’s changed, where the shift is, and how innovation has created the opportunity. While presenting, watch and listen to your audience and then adjust your pitch based on the clues you’re receiving. Recognize and address the unvoiced concerns!
Keep the conversation moving! Up-level the discussion after it has crossed a certain tangent. Frame the problems and solutions in a way that it relates to the issues they experience directly. Building a business is extraordinarily hard. For it to work, you need to be able to recognize potential problem areas and be open to getting help when you don’t have all the answers.
You should have some proven traction before presenting the idea in front of investors. Investors always have a better set of metrics to predict success and above all, there is a lot of competition already. So making the investors see profit even before they invest will capture their interest.
Play to your strengths. Your objective is shown to the investor that your idea is strong and it will be done better if you correlate your core strengths to the business idea. The investor should feel that if he invests in such idea, you are the only person who can best execute it.
Keep it simple. Yes, you read it write, keep and present it in the simplest format. Pitch your idea to your family and friends and take their feedback. If you can convince your closed ones to invest in your idea, you can convince anyone! Your pitch should be very clear. The more you practice; your pitch will keep getting better. Learn from every meeting and interaction that you do.
Your entire pitch is incomplete if you miss on showcasing the addressable market and the prospects who will buy your product, your business strategy, your plans for product delivery, your key milestones, analyzing your completion and explaining how you’re better and last but not the least what kind of ‘Investment’ are you looking for. Planning and execution of how are you planning to deploy the investment to meet the specified milestones. So successfully deliver on what an investor wants and you will have a truly irresistible pitch.
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