How to pitch to investors
Posted on: 27/10/2014
Make it emotional
An initial pitch to investors isn’t about closing the deal there and then. You’re starting a conversation and gaining the listener’s emotional involvement. Focus on this rather than the detailed financials- that will come later. Convey your passion for this project and explain why what you do matters.
Once you’ve got an investor emotionally on board you can go into more detail about the finer details.
Know who you’re pitching to
Before any pitch you should know what you are looking for. Is it private investment? Government investment? Are you trying to recruit new advisors? You need to be clear from the onset and tailor your pitch accordingly.
What are you asking for and what will you do with it?
Explain what’s in it for them
Potential investors are all looking for something, be it profits, enhanced PR or simply to get involved with a worthwhile cause. You need to explain clearly, what they will get out of investing in your business and why they should choose you. If it’s private investment, you should give an idea of when they will see a return on investment.
Follow a simple structure
A simple example is:
- What is the problem?
- What’s your solution?
- How will you make money?
- Who is your team?
- How can investors help?
A more detailed one:
- Revenue model
- Market size. How do you know?
- Team and track record
- What do you need to realise your goal?
Don’t be scared of mentioning competition
If you tell an investor that there is nothing anything like your business you will immediately lose credibility. All investors know that similar products and services will exist. Mention your competitors as it shows you’ve done your research. Talk about how you are addressing the problem better than they are.
A healthy competition shows that there is a demand for your product. Just make sure you know how you are better.
- Don’t give hand outs until the end- Otherwise this will distract them.
- Make brief statements- Keeps listener focus and stops you getting lost.
- Keep slides to a minimum- Keep their attention on you.
- Don’t go into autopilot- If you feel yourself going through the motions, stop yourself and start again. Don’t make it robotic. People invest in people.
- Make it emotive- Keep data to a minimum. You’re gaining emotional involvement at this stage.
- Build momentum- Discuss your achievements and convey a sense of momentum. Make it seem like your company will succeed irrespective of the investors you’re pitching to.
Dragon Den’s Deborah Meaden offers similar tips on her website.
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Written by Martin Stocks | @Stocks1986