The business pitch is a daunting process for most entrepreneurs. A critical timeframe, it can help set key partnerships and shape a company’s future. Whether you showcase to a large audience at a conference, or to potential customers, partners, or investors, delivering a high-impact pitch is a must.
In today’s competitive climate, entrepreneurs must stand out; you get less than 5 minutes to deliver a compelling pitch that convinces your audience to select you. How can you communicate your business idea in such a way as to get others on board?
PREPARE, PREPARE, PREPARE
First and foremost, spend a lot of time and energy preparing. You must be able to foresee every objection possible and have a ready-made answer. Do your homework – this includes knowing your problem; solution; how your product works exactly; facts and statistics via customers; how you plan on making money; what the market is; how you will go about marketing; key financials; and anything else you need to know.
PITCH ACCORDING TO YOUR AUDIENCE
Study the backgrounds of every single investor you are about to meet and try to understand what drives them, in order that you may adapt your pitch accordingly. Your presentation will differ if you are pitching to a potential partner vs. a potential developer for example. Be clear, look fresh and energetic, and answer every question like you own it.
PRACTICE IN FRONT OF OTHERS AND STUDY YOUR NUMBERS
Refine your pitch – keep iterating until you can no longer refine; practice makes perfect. The more comfortable you are, the more effective it will be; know your key points by heart, so that you may keep the momentum going. Once you confront an investor, it is best not to hesitate much, which means you better study your numbers and come in with a negotiation strategy – this requires a lot of preparation ahead of time.
TELL A STORY AND CONNECT EMOTIONALLY
Presenting your pitch as a story makes it far more interesting to listen to. You should make an emotional connection with an investor, after all, people are people, and they tend to react emotionally, then rationalize and make decisions. Keep your cool, be sincere, be human and be positive – if you are visibly uncomfortable, it will make investors uncomfortable also.
LESS IS ALWAYS MORE
Make sure that your presentation is more visual and interactive, less wordy – short and to the point. Visual presentations and physical interaction have positive psychological impacts on an audience. If investors do not grasp your concept in a short timespan, they may presume that customers will not either.
You may prepare a more thorough presentation to be sent later on, and/or an executive summary review that you hand in at the beginning, but your presentation may well do with a single slide showcasing your company name/product.
DO NOT HYPOTHESIZE – EXECUTE
Inspire confidence with facts, not fiction. Most investors want low-risk businesses with smart managers. A company with an existing cash flow, track record and real-world experience is way better than any business plan. Find ways to implement your MVP, and create a functional business before pitching for investment.
Investors care about sales. What are your sales to date? How much will you be making this year? Use sales numbers and projections to showcase the value of your product.
BE REALISTIC AND PROVE YOU ARE FISCALLY RESPONSIBLE
Sell yourself as a phenomenal entrepreneur and potential business partner – being confident comes from knowing things, not by acting out. Be reasonable and responsible; do not present nonsensical financial graphs that claim unrealistic truths, investors will not take you seriously. Show that you can manage expenses – avoid being excessive and asking for a large salary in the beginning; investors want you to be in a place where everything is on the line.
BUILD A TEAM OF CREDIBLE EXPERTS
Find the people who know what you do not. You need a team of credible individuals who are smart and whom you can trust. Investors fund a team as much as they fund a business concept. No matter how great your product may be, your business as a whole is as important.
A SAMPLE OF QUESTIONS YOU SHOULD BE READY TO ANSWER
- How much money have you personally put into your business?
- What total sales will be in your forecast this year?
- How much revenue has the business produced to date?
- Why should I give you $ X if your company hasn’t even made $1?
- How can you possibly substantiate gross revenues of $ X in year 2?
- What is your cost?
- How much equity are you willing to forego?
Bottom line is, you have 30 seconds to get someone’s attention and make an impression. If investors fund 10% of the businesses pitched to them, this leaves you with one option only; crafting a pitch so complete and exciting that they simply cannot refuse it.