An Introduction to Investor Pitches

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You’ve filled out all the paperwork, organized all your patents, developed your prototypes, and maybe started selling products. Your company has reached the point where if you want to get any further, you’ll need some money. It’s time to pitch to investors.

Investing GraphicThe biggest mistake you can make when developing a business pitch is thinking that what you’re pitching is simply a business or a product. Investors hear of great ideas and promising businesses constantly. A key element that distinguishes one company from the next is the people running it. Try to pitch the team behind the company. A great product is a great product, but it’s ultimately the people who manage a company who turn that product into a success. A business pitch, then, is really a story. Investors want to see where your business has come from and where it will go next. Rather than fitting every detail about the company into a crammed pitch, prioritize elegance and rhetorical effectiveness. The details to include should serve the broader narrative and nothing else.

If a business pitch is a story, it must grab the listener’s attention. Emphasizing the narrative aspect of a pitch is crucial in those opening moments. Instead of jumping right into data or demonstrations, start simple and succinct – layout the problem the company addresses. This creates a human reference point to understand your product. It also conveys that there is a need and market for the product. The first one or two slides (or paragraphs) should be highly engaging for this reason, opting for impactful visuals and even media/customer blurbs. It’s important not to drag this section out for too long.

Use the problem as a springboard into your proposal – how does your product aim to solve your problem? Is it a need that no one else is addressing or is it being addressed in a better way? It’s important to indicate how this product will be able to beat out your competition. Once you’ve done this, you can start to discuss your business model in more depth. Be realistic about potential market penetration. Include information about production costs, features, benefits, regulatory requirements, and potential sales price.

Take some time to explain the revenue model – potential investors are interested in how the business will generate revenue. This is a good time to deploy testimonials you may have from users and previous investors. Any positive media or trade coverage will come in handy here. Close by indicating what your next steps are. What is your company looking to do that it can’t do now? This of course leads to the natural question – how will an investment support these next steps? You want to make clear what you are looking for from investors, as they’ll want to know where their money will go.

Meeting GraphicAs a business pitch is a story, round out your narrative with an exit strategy. Investors are interested in payoffs, not just returns. Emphasize the different possibilities for growth, but be realistic. The best business pitches find the right balance between the emotional tenor of the company’s story and the data to show its true strengths.

The final requirement for an effective business pitch is research. Research the person and group that you’ll be presenting to. If you can find it, see what they’ve invested in before, how much time they can/will devote to your company, how well they know your industry, the types of connections and referrals they have and any other important interests. During this process, both sides are trying to find the best match.

Once you have a pitch, practice is key. Try to be prepared for the unexpected, things often don’t go as planned. It may be advisable to have a few different pitches prepared. The most formal would be a full business plan. At a step down from this would be an adaption of the business plan in a PowerPoint of 20 slides or less to accompany an oral presentation. For an even more concise pitch, cut everything down by half – this sort of condensed, impactful proposal is known as a “pitch deck.” As your barest option, prepare a quick, five-minute “elevator pitch” without visuals. This way, you have a pitch ready for a wide variety of situations.

Your business pitch is meant to demonstrate your company’s potential as well as your aptitude not only as someone who can generate capital, but as a leader and effective communicator. Keep things tight, keep things emotional, and let the rest follow.

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