Pitching your startup idea to potential investors is the most important thing you’ll do for your business. Therefore, it is a nerve-wracking process. A lot of thoughts go through your mind once you start to prepare for the big presentation. Entrepreneurs and business persons list a lot of tips and tricks for a successful business pitch for investors after years of experience. But what are the most important things you need to focus on?
What Are Business Pitches?
In the simplest of terms, business pitches are presentations put up by companies to investors or groups of investors to showcase their business idea in hopes of garnering potential funds for the business.
Usually associated with the world of start-ups. The term consists of all the conversations and presentations that companies have with potential investors that can take place on collective platforms. Or may even happen over email or the phone (though we believe that a face-to-face pitch is the best one!).
This is an opportunity not just for the startup owner to properly explain the business opportunity to investors but also for the investors to learn more about the business and make their decisions based on solid facts and evidence provided by the company.
Business Pitch For Investors
Sure it’s easy to talk about your business ideas with your friends and family because in such conversations it is your passion that’s guiding the flow. However, doing the same in front of those that can potentially make or break your idea is an experience that is quite different
Making a business pitch for investors is a massive opportunity for you to not just put yourself out there but also convince mere strangers to invest in your passion.
We use the word ‘passion’ because if the investors don’t feel like you’re truly immersed in the idea that you’re pitching to them, they’re less likely to give you the funds that you’re looking for.
At the same time, it is important that to strike a balance between passion and providing the investors with adequate information. Sharing evidence to show how your business idea has the potential to change the business landscape and offer a product/consumer experience that currently does not exist.
Now that we’ve set the tone for the stage that is business pitches for investors. Let us discuss some important tips to make your business pitch successful and get the most out of it.
Make Your Pitch A Story:
Humans have a natural liking for stories. So, your idea in the story form would be much more successful than presenting it just like another idea. When pitching your startup or business idea to an investor, tell them why you thought of this idea? How do you want to make the world better through this? What was your inspiration? Your audience will not only take interest in your pitch but also remember everything you said. This will make your pitch more considerable. Also, be realistic about your story. If it’s authentic, it is gonna attract people anyway.
Research Your Audience:
Know your investors and mix up the stories. Tell them how you line up with them, why your companies need to work together. What are their strengths that you need and what are your strengths that’ll better their weaknesses? Why you are better than the rest? Why they should choose you over others? Your pitch should answer these questions both visually and audibly. Investors tend to accept 10 out of 100 ideas pitched to them. Unless they relate to you, it is very difficult for you to stand out from the competitors.
Be Investor Specific:
A big mistake that you can make is to prepare one presentation and use it for all of your investors. After researching your audience, you must change your pitch according to their specific needs and business domain. One investor might not be interested in knowing what the other is. Timing is very important in this regard. If you are given a specified time by the audience, take at least 2 minutes less. Always make time for follow-up discussion.
Tell Your Business And Revenue Plan:
The most important thing for your investor is a conversion! So you need to tell them how you plan to go about making money from the investment you’re gonna get. Set a realistic time frame, and tell them where you will be at the end of this period. Tell your marketing idea, your revenue model, in short, tell them how their money is going to benefit both of you. If your investor feels you don’t have a set revenue model, they are very unlikely to invest in you.
Be Flexible But Not Needy:
After your story, get ready for questions and queries. If you try to answer the unasked questions beforehand, that will be a plus. Your audience will want to negotiate on some terms and might want you to change your plan a bit. You should be ready to defend your idea and also know clearly what the limits of change are. Negotiating doesn’t mean you have to accept everything they say. Be open to suggestions but don’t change your plan just because you won’t get investment without that. Be lenient but be confident!
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Successful Pitches That Made The Difference
Making the perfect business pitch is integral to the mere survival of your business idea – if you leave anything behind, you might be putting all the work you’ve done at risk. However, this is not an opportunity to fret over, and instead of an opportunity for you to look around you and learn from those that went through the same process and made it through.
While these pitches aren’t exactly word-for-word with the original, they still offer an inside look into what made these companies stand out to their investors.
Airbnb
It was in 2009 that Airbnb came forward to pitch their idea of creating a platform that would connect travelers with locals of the visiting country to create a wholesome traveling and lodging experience.
By studying their deck, we see that their pitch revolved around the idea of creating an ‘experience’ for tourists and not just any traveler. Their target market is tourists that are looking for a new experience through their travels and not just any other traveler that might just be visiting a new place for business purposes.
This is where they create the biggest difference – from the get-go, they market themselves as a platform that is aiming to serve tourists and not any other traveler.
Moreover, by emphasizing locals and the whole “travel experience”, they can show their platform helps bridge a gap that existed in the lodging market back then.
At the same time, they use the example of the application Couchsurfing to provide proof for the fact that there are indeed locals out there willing to rent out their homes to travelers coming into their city. This particular reference helps them avoid any questions regarding the willingness of people to even put up their places for rent on the platform.
All in all, this pitch not only showcases the need for such a platform but also provides substantial backing to show how this can prove to be a fruitful opportunity for both travelers looking for an experienced and locals looking to make some extra money.
Uber
Considered to be a leader in the car service industry, this company too went through the initial process of pitching its idea to investors that could help turn their vision into a reality.
Originally marketed as “Uber cab”, their pitch revolved around finding a solution to the taxi monopolies that existed within the market and the impact it was having on the quality of service being provided i.e. a sheer reduction in the quality.
By showcasing the problem that currently existed in the market, the pitch went on to provide solutions to it while also highlighting how their service would be a step above the current providers in the marketplace.
This was done by taking the investors through the various features provided within the application such as the quality of cars, the ease of booking a car, and the thorough sign-up process for drivers.
Through these features, they were able to show how their application would not only provide exceptional service but also keep the customer’s safety and time in mind – both aspects that concerned anyone and everyone looking for a car service.
Towards the end of their pitch, they introduced the Uber application, which was their solution to all of the problems that existed in the market while also sharing with the audience their operating principles to show that they weren’t just offering a service to the consumers, but were indeed looking to kickstart a revolution within the ride-hailing/car service industry that would operate keeping in mind the customer’s needs.
