When you reach a certain point in your start-up you may want to try and secure some investments to allow you to move on to the next stage in your plan, this is known as pitching. You can even pitch before you have your MVP if need be! Recently I attended a pitching workshop at ESpark Glasgow to benefit the Semi-Finalists of Scottish EDGE and picked up a number of tips on how to pitch your business to investors.
Pitching isn’t necessarily just for investment, every time someone asks you about what your business does you want to be able to give them short understandable overview. Pitches can also vary in length from 60 seconds to 10 minutes, your pitch should allow you to adjust it for each situation and length.
Structure Your Pitch
It is important to have a structure to follow for your pitch but it’s also equally or more so important that you don’t lose your personality and become a robot. You want to get your passion across, this is your life!
Your introduction should be something that catches the attention of your potential investors, you can do this by asking a question or providing some information that will shock them.
Describe what problem you are solving and provide an example with statistics of people who suffer from the problem.
Your description should be focused, straight-forward and paint a picture in your audiences head.
Give an overview of how you are solving the problem and how innovative your solution is, is it something that can be easily copied?
Market Size and Revenue Model
Your potential investors may not be familiar with the industry which you are targeting so let them know how big the market is. Remember to mention how many of those you can reach today.
What are your expected yearly revenues? Be truthful because most investors have been where you are and know that businesses generally don’t make any money for a few years.
What is your revenue model? Subscription, licensing, pay as you go, advertising are a few, decide on yours.
How are you going to sell your product or service?
Who is your competition? Everyone has competition whether it is direct or indirect. Don’t say you don’t have any.
How are you better than your competition? What are you doing different? Do you have an unfair advantage?
What risks face your business and how will you mediate them?
A lot of times investors are backing the team rather than your business.
Here is your opportunity to tell them who you are and show that you understand the problem and are the best person to solve it.
Is there anything that your team is missing? Sales person, developer, designer.
When are you expecting to hire staff?
Tell the investors what you’ve done so far and why you need investment now, show that you are measuring progress and explain how their investment will your business.
If you feel like the time you’ve been allocated to pitch in isn’t long enough try to give teasers of information so that you will be asked to go into more detail afterwards.
Be prepared for the investors to pick holes in your business, don’t get defensive. Say something along the lines of “that’s a great question, thanks for asking.” to give yourself some time to come up with an answer. You’ll be asked what happens if your plan doesn’t go accordingly, what are your plans a, b and c?
Ask them to explain the question if you don’t understand it. Also just remember an important take-away is to remember that they want to give you money or you wouldn’t be there pitching at them.
What tips do you follow when you pitch your business to investors? Drop your tips in the comments below!