We cannot predict the future.
However, we do tend to speculate what the future may bring.
So, we prepare, prepare, prepare for events even if there’s no definitive answer that it will happen.
The same goes for fundraising.
We may not have a certainty that a VC or investor may say “Yes”, but we do try to increase the odds in our favor by shifting things that are within our control – like how to pitch to investors.
What is a pitch?
A pitch is an offer. You use it to persuade someone to get to a certain goal.
For example, think of these two things:
- You don’t have lunch money and
- Your friend hasn’t done his assignment yet.
You come up to him and offer to do his homework in exchange for lunch money and he gladly agreed.
You just pitched somebody your academic services in order to get your ideal goal of having lunch money.
Everybody’s happy. Win-win.
In fundraising, your ultimate goal is to raise money for your startup company.
Your pitch will be how your company can bring to the table, how it can profit, and how investing in it can benefit your investors in the long run.
The difference between a Pitch and a Pitch Deck
We’ve established that a pitch is your offer.
A pitch deck, on the other hand, is a visual presentation that turns your offer into readable content.
Imagine a Powerpoint presentation that holds crucial information for your company, and has a direct ask in PDF Format.
That’s a pitch deck.
Without further ado, here are tips on…
How to Pitch your Company to Increase Your Chances of Getting Backed by a Venture Capital or an Investor.
1 – Have a clear and concise pitch deck.
A pitch deck is one of the most important tools any startup founder could have. It lets your investors be aware of what you want to ask them in a visual format.
The contents of a pitch deck are a serious undertaking and should not only be there because “It looks good.” Function over aesthetics is always the way to go.
If you want to know how to make a clear and concise pitch deck, check this article.
2 – Rehearse your pitch and master it.
Remember, all negotiations involve two-way communication, so rehearsing with other people is the best way to go.
In my experience, I find that these 2 types of people have brought the most fruitful conversations:
- A seasoned expert/advisor in the field
- A person who has little to no background in the field.
It is a given that a seasoned expert/advisor will have a well of knowledge available as a result of his experience.
They’re able to point out:
- holes in your judgment
- challenge your normal beliefs
- and possibly redirect your initial notions to something more realistic.
On the other hand, someone who has little to no background can reinforce clarity.
These people can:
- come up with questions that an expert might not think of because of their “expert blindless”
- give a neutral take on what you’re presenting
Do it as many times as you need to until it feels like muscle memory to you.
The key side to this is that it will boost your confidence in delivery.
And while mastery of the content matter is important, it’s also the delivery that captures attention and drives that CTA forward.
3 – Tailor your pitch.
Over the months, I’m sure you would have been able to talk to different folks of different strokes.
When you tailor your pitch to investors, that does not mean you should lie about the data you present. Do not ever do that. You want to be 100% honest in the numbers you bring out.
Tailoring your pitch means tweaking your message, or highlighting the Unique Selling Proposition that the investor values. All whilst keeping everything transparent and factual.
It helps to do research on the investor’s ideal industry, interests, and portfolio before the meeting.
Some VCs have their thesis strictly tied to one region so doing the necessary research will help you you customise your pitch but also filter out the VCs that may not consider
In the long run, it will save you much of your time and effort.
4 – Emphasise your unique selling points (USP).
A USP sets you apart from the rest of the millions of businesses. Some things you might want to highlight are:
- A strong team (Achievements of the team)
- Competitive Edge (How more efficiently your business can solve the problem in contrast to existing players in the space)
- Traction (Whether your business or company actually has a proven offer by assessing the number of people using, paying, or interested in the platform)
- Scalability (How your business can handle 1 to a million or more customers)
- Industry and Market Analysis (How much of the market you can possibly make into customers)
It’s good to note that in pitch calls, you might have 20-30 minutes to have investors/VCs sold on the idea from the get-go, so it’s best to focus on the important ones instead of overwhelming them with information.
5 – Take down notes of questions your investors have asked.
This is mainly done to make incremental changes in your pitch deck (and possibly how you decide to run things)
Questions arise from a lack of clarity so it’s best to keep a document where you collate these questions and review your pitch deck if you can tweak it to include that information.
You ideally want proactive questions centered around the next steps of investment instead of spending time clarifying what should be obvious in the first place.
6 – Be ready for negotiations.
There will be talks about the details of the investment, including the equity and the valuation of your company.
The road up ahead is still long, but an arduous journey can hold more learnings.
I hope that helps. There will always be more to learn as we continue our founder journey but these are some basic tips to get you through the next stages.
Also, if you’re an investor, venture capital, advisor, or founder, or you want to talk about business, I’d love to chat with you on LinkedIn.
I look forward to hearing from you.