Pitching your startup to investors can be intimidating to many entrepreneurs. Will they like my idea? Will they see my passion for my business? Will I receive the necessary funding to grow? What specifically should founders prepare before taking the pitch stage?
In this blog, we will take a closer look at the components of a pitch, the supplemental materials founders should have on hand, and how to maximize the effect of your pitch.
What is a Pitch?
Simply put, a pitch is an introduction to your business in a limited amount of time; either a 90-second Elevator Pitch, or a longer, more in-depth common pitch. The main goal of a pitch can be to attract new customers or receive funding from investors, depending on the needs of the business. When pitching to investors, it is important to be clear, concise, and adequately outline the potential opportunities and threats the investment holds for investors. Balancing the length of your pitch with the level of detail you provide can be one of the most difficult parts of pitching. You want potential investors to stay engaged with your pitch, while not leaving out important details that could affect their interest in your business.
The Pitch Deck
A pitch deck is a concise visual presentation of the company that covers the basic Who, What, Where, Why, and How questions.
- Who – Who are the principal operators of the company? What are their roles within the company, and what backgrounds do they have that serve the position well? Who is the target customer of the company?
- What – What does the company do? Is it a new idea or a revolutionized way of executing an old idea? What does it cost to produce the product or service?
- Where – Where does the company physically operate, and in which market does the company compete?
- Why – Why is this company different from others? Why should investors be interested in this specific company? What unique problem does the company attempt to solve?
- How – How does the company make money? How does the company attract and retain customers?
Additionally, pitch decks should also include current user traction, historical financials if the company is already operating, and financial projections based off historical traction, user acquisition, and industry opportunities.
Some examples of characteristics worth including are: company history, current operations, market and industry analysis, target market, financial statements/projections, intended use of funds, team members, growth opportunities, and plans to scale.
The Verbal Pitch
While a pitch deck is important to have as a visual representation of who the company is and how it operates, the verbal pitch is equally, if not more, important to the overall pitch. Investors typically want the pitch deck to supplement and back up what the founder says instead of reciting the pitch deck verbatim. The verbal pitch should be engaging and entertaining enough to keep investors focused, but detailed and informative enough so investors do not necessarily need to see the pitch deck to understand the history and business model.
The verbal pitch provides the opportunity for your personality to shine. Let potential investors see your passion for the business and understand your drive and motivating factors. The verbal pitch is a great way for investors to get to know the founder and business on a deeper level.
Supplemental materials are good to have on hand and can help your pitch stand out from the crowd. Giving potential investors something physical to reference can help them remember your pitch more succinctly.
Many investors will want to see expanded financial statements. In addition to financial graphs contained in the pitch deck, it may be worth taking the time to print out full copies of supplemental financial materials.
If you have a novel or complicated product, product samples or diagrams can help investors tie the pieces together and understand the product. Providing something tangible can help bring the story to life.
Additionally, since the pitch deck is meant to be brief and concise, any information not contained within the pitch deck can be disseminated as supplement material.
Maximizing Your Pitch
When you pitch your business, there are a few ways to maximize impact. First, pay attention to whom you’re pitching. Do they have experience in your industry? Do they have connections that could further your business? Know your audience and tailor your pitch to find common ground and make specific asks they may be able to fulfill.
Second, prepare responses to potential questions ahead of time. It is a good idea to think of any likely questions that may arise during the pitch and prepare the answers in advance. This will show investors that you have thoroughly considered future possibilities and may be better prepared to address challenges.
It is important to not only explain your product and target market, but also demonstrate adequate product-market fit. Market research and collected data may be useful to prove your business is competitive enough to thrive.
Finally, let your passion show. Let potential investors see your dedication, commitment to making the business thrive, and the personality that makes you, you!
Are you ready to raise capital? You can submit your business for consideration at https://microventures.com/startups
The information presented here is for general informational purposes only and is not intended to be, nor should it be construed or used as, comprehensive offering documentation for any security, investment, tax or legal advice, a recommendation, or an offer to sell, or a solicitation of an offer to buy, an interest, directly or indirectly, in any company. Investing in both early-stage and later-stage companies carries a high degree of risk. A loss of an investor’s entire investment is possible, and no profit may be realized. Investors should be aware that these types of investments are illiquid and should anticipate holding until an exit occurs.