How to Successfully Pitch Your Business Idea to Investors
Did you know that investors only invest in around one percent of the pitches they receive? Because of this, it is critical to make sure that your pitch stands out from the crowd so that you can fall into the one percent category. Of course, this can be a lot easier said than done. But don’t panic, as we are here to help.
Below, we will take you through some tips that can help you to pitch your business ideas to investors in a successful manner.
Perfect your pitch deck
There is only one place to begin when pitching your business idea to investors, and this is with your pitch deck.
This is your chance to showcase your business to investors effectively, so you need to make sure you do so with care. Pitch’s pitch decks are a great place to start, as you can choose from a whole host of attractive and professional templates.
But what else does it take to create a winning pitch deck?
Well, you need to make sure that your pitch deck is straightforward. While it can be tempting to overload potential investors with information, we are sure you have heard the saying that less is more, and this is definitely the case!
Focus on the points that really pack the most powerful punch, rather than trying to cram in as much information as possible.
We also recommend that you prioritize your story over your statistics. The aim of a pitch meeting is to engage with possible investors. A list of metrics and facts will have a lower impact in comparison to a narrative approach.
You should provide stories about your business that the investors are going to be able to relate to, for example, how your customers use your services or products to enhance their life.
Keeping your pitch deck updated is also critical. Companies will typically pitch to a number of possible investors before funding is secured. Make sure that your pitch deck is updated with all of the latest information before every pitch, such as recent milestones and critical metrics.
This will make sure you do not end up presenting out-of-date details to your possible investors, ensuring every pitch is incredibly professional.
A final tip that we have for you in terms of pitch decks is to make your pitch deck a standalone deck. A possible investor may want to take a look at the deck once the presentation has concluded. Make sure the deck features the most vital information they need in PDF or print format.
Practice makes perfect
We cannot emphasize enough just how important it is to practice your pitch. If you are not able to speak in a quick and confident manner regarding every element of your business, you’re not going to get very far – it is as simple as that.
No investor is going to believe in your business if you don’t even know about it yourself!
Too many entrepreneurs think that just by knowing their company they can succinctly and quickly explain the value of it. Because of this, they go into a pitch meeting without preparation.
When this happens, you will probably find yourself rambling on for more minutes than required. Instead, if you practice, you can simplify your message, and only keep the elements that build up your company.
Build some credibility by discussing your successes
In addition to the tips that we have mentioned so far, we also advise you to build some credibility early in your presentation. Take some time to share any relevant traction that you have made in the industry to date.
As mentioned earlier, securing investment is an incredibly competitive field, with investors only investing in around 1 in every 100 pitches they receive. Therefore, you cannot expect investors to choose your business if you have not taken any steps forward yet.
This is your perfect opportunity to show your business off a bit. Think about what is going to impress possible investors. This could be product launches, key hires, contracts, or sales, for instance.
It is likely that bits and pieces of this have been mentioned early on, yet this is your opportunity to create a full snapshot of your company.
We always say that you should not simply leave it at what you have done in the past. Make sure you talk about where you are going. Show them a roadmap of the steps you will take next, any additional milestones, and how funding is going to help you achieve these milestones.
Don’t forget to discuss your competition
We cannot believe how many business owners today leave this vital part of their pitch out of the equation! A lot of people do not provide any information about their competition at all. There are then those that merely list their competitors but they do not explain in any detail what makes them different.
The most effective way of communicating your value proposition in comparison to the competition is by using a competitive matrix format. This involves a list of your competitors down the left-hand side of the page. At the top, you will show your benefits and features. You can then check the boxes of the businesses that offer the service in question.
In an ideal world, your business is going to have every box checked. However, your competitors will be lacking in some areas, and therefore, they will have some empty boxes.
Present your financial projections during the pitch
It is important to display the revenue you are projecting, per product, over the next three to five years. Do not simply throw numbers out without any evidence. You need to be able to back them up!
You will notice that investors will take their smartphones out of their pockets, fire up the calculator, and double-check that their numbers add up. So, make sure you give them the data that adds up!
If the financial chart you display shows what we know as hockey-stick growth, it is vital to explain what is going to happen to cause those inflection points.
Make sure you speak about your finances in a clear and quick manner. It can be easy to get carried away and spend an extensive amount of time explaining your financials. However, your investors will ask questions if they want to know more. You can save some time at the end of your presentation to answer any queries your investors may have.
Use feedback to make your pitch as good as possible
You need to use feedback to your benefit. This is both in regards to getting feedback before you pitch and after your pitch.
Before you pitch, it is worth testing out your presentation on some people that you know and trust. This will help you to get some practice in and build your confidence. At the same time, your trusted friends may notice some issues that you have not noticed because you are too close to the project.
This is why it is imperative to make sure you test out your pitch on a few people before you go and present it for real.
Aside from this, you need to make sure that you get all-important feedback once you have given your pitch.
Irrespective of the outcome of your pitch, i.e. whether you secure another meeting, the investor is not interested, or you get funding, you should always be looking for areas of improvement. Do not be afraid to ask the investors in question for some feedback that you can learn from for the next time you pitch.
If the investor does not want to give you any feedback and offers a very short answer, do not push him or her. After all, you have just spent some of their time, and if they do not want to give you any more of their time, this is something you need to accept.
If it is possible, we would also recommend that you get another team member to look at your notes and review them after the pitch. They will be able to give you their opinion on areas such as any topics you stumbled over, weak points of your presentation, and slides that caused negative reactions.
You can use all of this knowledge to make sure you do a better job next time and secure that all-important funding.
Final words on successfully pitching your business ideas to investors
So there you have it: everything you need to know about pitching your business ideas to investors successfully. We hope that the tips and advice that we have provided above will help you to acquire an investment in your business so that you can grow it to the next level.