One of the most difficult things for many entrepreneurs to do is give a pitch about their companies to potential investors. For one thing, public speaking is people’s number one fear, so there’s the innate concern about being the focus of attention while attempting to deliver a convincing message. And in a pitch session, whether you’re presenting to one financier or a team of investors, you have an audience that you need to persuade and one opportunity to get it right. The difference between pitching successfully and not can result in you leaving the meeting with a financial commitment or empty-handed.
For entrepreneurs seeking funding for their startups, it’s important to learn how to develop and deliver an effective pitch. Below are some tips.
Believe in yourself and your concept.
Entrepreneurs are passionate about their ideas for new ventures. They eat, sleep and breathe them. When a potential investor is listening as you explain what you plan to do and why you need the money, he or she should be able to feel your enthusiasm. When you have a strong belief in yourself and your business concept, it will be evident in your words, voice and body language and manifest itself in the energy you convey.
Explain why your concept is needed.
Seasoned investors know how the marketplace works, so it’s incumbent on you to convince them that there’s an existing problem you’re trying to solve or a pain point that your company is going to address. Your challenge is to convince them that there is a need for what you’re proposing. One way to do this is to state the problem, backed with supporting data, and an actual, real-life example or two. Then explain how your company or solution will address that need and make your customers’ lives better.
Know your facts.
Potential investors are in it to win it. In other words, they want to invest in companies and concepts that will turn a profit and provide excellent return on their investment. This is where you really need to be prepared with important data that explains specifically who and where your customers are, how large the market is, how you plan to use the funding to create and run your business, and how and when you project that profits will be realized. I cannot stress enough the need to be thoroughly prepared with all the key information that proves how your investors will realize a return on their funding. Their bottom line is THE bottom line. When will I get my money back and when and how much profit will be generated?
Get to the point quickly.
Your potential investors’ time is valuable, and attention spans continue to shorten. Use your time wisely and, while your pitch needs to be as detailed and complete as possible, use an economy of words. In short, when you deliver your pitch, don’t waste time. Provide a quick, clear overview of your proposition, and structure your presentation so it has a clear beginning, middle and end. The point is that you want to grab your listeners’ attention, hold it and make a compelling case for why they should fund your idea.
Be clear about your competition.
Are there other companies in the marketplace providing something similar to what you’re proposing? If so, make your competitive advantage very clear. Tell your investors why what you’re proposing is better than what your competitors offer. Explain the differentiating factors and how you plan to position your concept as the only choice.
Talk about your team.
It can only help your case if you tell your investors about the level of expertise that you have on your team. This lets them know that you’ve surrounded yourself with the right people to help you carry out your vision. It also inspires their confidence in you as a leader.
Always be closing.
Watch your audience’s reactions and look for signs, both verbal and nonverbal, that indicate interest and even enthusiasm on their part. Don’t oversell, as saying too much at this point can hurt your case. Instead, describe what steps you plan to take next and ask for their commitment. Above all, be positive.