August 28th, 2017 | By: Ismael Wrixen | Tags: Pitching
If you’re expecting to get the funding you need to take your startup to the next level, you need to get serious about your business pitch. Without the right amount of preparation, people are not likely to throw money at your “amazing” business idea.
Here are some business pitch tips based on my experience as a CEO and entrepreneur. They will help you impress potential investors and find the right fit for your business.
Benjamin Franklin was right. “By failing to prepare we prepare to fail.”
Leave your startup business pitch preparation to the last minute and a “thanks but no thanks” is all but a fait accompli. If you think natural charm and some ‘ad-libbing’ will get you through, please think again.
Once you’re in that room, it’s too late to start asking questions.
Who will you be pitching to? What companies have they invested in before? It’s information you need to know ahead of time.
Making this effort will not only ensure you know who your audience is, but give you an understanding of why they might want to spend money on you.
Also, resist the temptation to cold call potential investors. Reach out to your existing network and try to get a personal introduction.
Jennifer Lum, entrepreneur, investor and co-founder of Forge.AI, recently asked eight fellow investors what had convinced them to fund projects in the past.
“The strength of the co-founders, the quality of their product and the market demand,” said Ty Danco, a director at Techstars Boston.
Serial entrepreneur Andy Palmer said that he looked for the strength of the idea, and “how mission-driven the founders were.”
Of the eight investors Jennifer spoke to, seven agreed that the founders were a crucial consideration. A great idea and a sound vision for the company were both important, but the deciding factor was always the people behind it.
The goal of your first meeting should always be to secure another investor meeting.
Investors won’t necessarily offer you what you want immediately – this isn’t ‘Shark Tank’ or ‘Dragon’s Den’. When crafting your initial startup business pitch, keep this goal in mind.
The most effective pitch decks are neither fancy nor long. Here are some tips to keep time-poor investors engaged in your presentation.
Focus on the most important information.
Cluttering up your page with data increases the chance of your audience disconnecting, and you don’t want that.
Keep your slides user-friendly. It should be easy to read and visually appealing. Each slide should only contain a few elements, not War and Peace.
Take Airbnb as an example:
Their pitch deck is one of the most searched on the internet. Its layout is consistent; it’s well branded and importantly, follows the classic 10-slide template, which keeps the presentation focused. Any more than this and you risk the chance of investor ‘fade-out.’
First impressions count, so your first slide should grab attention quickly.
Remember, you only have 20 minutes or less to make an impact.
“Anything you do that handicaps a VC from making a decision in less than 20 minutes, dramatically reduces your chance of getting funded,” said Jason M. Lemkin, investor and founder champion of SaaStr Fund.
Social Media SaaS app, Buffer, includes a quote from Mark Zuckerberg related to their service on their first slide, lending credibility to their overall pitch.
When you pitch, never forget to include the following:
As I said before, it’s the people behind the idea you’re selling that investors buy. Don’t be afraid to include them in your pitch deck to show off your team.
Take the opportunity to demonstrate each team member’s core strengths. This means their areas of specific technical ability and their command over the market gap you are filling.
Also, answer any objections you think a VC might have. Can you co-operate? Do you have a track record of success? Give proof.
Customer communication software brand Intercom raised $800,000 based on the success of their pitch deck. The first slide highlighted their team members’ individual expertise and gave investors the confidence that the team had the technical ability to succeed in their niche.
You’ll need to be able to do this.
My advice is to always be as direct as possible, to answer honestly and if you don’t have an answer, be upfront about that too. Making up something on the spot will do more harm than good.
“Being direct (and honest) builds trust,” says Jason M. Lemkin, “you want to build that quickly if you can.”
Remember that this opportunity is for you. If you get an offer, make sure it’s the best fit for your startup, not just the best price.
And finally, don’t rush the process of crafting your business pitch.
Time is of the essence, but make sure you do your idea justice. Communicate the right message and make sure any potential investor has your best interests at heart.
Ismael Wrixen is the CEO of FE International, a market leader in the sale of SaaS, e-commerce and content businesses. I have overseen the sale of hundreds of millions in online businesses, including the sale of the popular accounting software, Less Accounting, and the acquisition of Drip by Leadpages. I am also an active investor in SaaS businesses, sit on the board of numerous exciting SaaS start-ups, including MageMail and MRR Media and am a member of the Forbes Finance Council.