By Trent Bagnall, Co Founder, Slingshot Accelerator
So, you think your big idea is ready for investment funding and you want to pitch to investors.
The pitch process is also a way for investors to screen and cull the large volumes of investment requests they receive. The art is in how you pitch your business, including your personal presentation, your confidence, the visuals, your timing and the pace.
The science is the content structure, including what investors want to see to make the investment decision. For most investors a five-minute pitch is more than enough to work out if there is something they are interested in talking to you further about.
Here’s what you need to cover:
Describe the problem you are solving. Is it really a big problem? Is it migraine or just a mild headache? Does the problem motivate people to take action?
The solution and secret sauce
What is your solution to the problem and, importantly, what is the secret sauce that makes your solution better than other available solutions? It is important your solution addresses the problem and you don’t just talk about the product features.
The market size
How big is the market and are there enough customers in the market to provide a sustainable business? A big turn off is the lazy statement “it’s a billion dollar market and if we get 1 per cent of that we will be massive”.
How does your business model work and how will you make money? You need to convince investors that for every dollar they invest, your company can generate tangible returns, either in customer growth or preferably revenue.
Investors care about traction over everything. Traction means growth in customers and it validates that you are solving a real problem and have a product people actually want. Either show them growth in customer numbers and revenue or explain how you are going to achieve it.
Investors want to know that you have a team that can execute your plan. Everyone in your business needs to be both willing and able.
Every business has competitors or alternatives. If you have no competitors then either you haven’t done your research or you don’t have a market for your product.
Often entrepreneurs forget the obvious: how much money do you require to execute your vision. You should ask for enough capital to rapidly deliver over a six to 18-month timeframe. Asking for not enough funding is often a red flag to investors, but so is asking for too much.
Use of funds
How will you spend the money? It is essential to have a detailed budget and know your numbers.
Reinforce to the investors why your startup worth investing in (your traction) and remember to add in your contact details as the pitch is often distributed to other investors
Your presentation deck should contain high-quality visuals and avoid excessive text, sounds, video or fancy transitions.
To avoid “technical issues” make sure your have a powerpoint, keynote and PDF version and are prepared with the right AV connectors, a clicker and worst case printed copies.
Please don’t wing your pitch. Practice until it’s in your skin.
Most importantly, show your passion to solve the problem.
More: I like Guy Kawaski’s recent infographic on the topic as well which you can find Here.