6 Steps to the Perfect Pitch
Many entrepreneurs’ crash and burn when delivering their investor pitch—and ramble on and on. There’s nothing more frustrating than being told, “I only need 10 minutes of your time,” and then 20 minutes later you’re still on slide #5. Investors will want you to be able to back-up your claims. Have a well thought out business plan on-hand to share, so investors can read more if they’d like to. The intention, after all, is that you deliver a powerful pitch, and their hands are out asking for either your executive summary or your complete business plan.
These are the most important things to keep in mind when you prepare your pitch:
1. Less is always more
An elevator pitch is vital. Verbose presentations and lengthy explanations will not impress investors, and most likely will turn them off. Present your business in a manner that’s short, sweet, and to the point. Investors need to be confident that your business will attract and retain customers. If they don’t grasp your concept in a short time span, they may presume that customers won’t understand it either.
2. Never hypothesize just Execute
Inspire confidence with facts, not fiction. Most investors seek out low-risk businesses with proven managers that are as close to guarantees as possible. A company with cash flow, a track record, and real-world experience has a better chance of getting investors than a business plan forecasting large returns. Find ways to test your business’s viability on a shoestring budget, and turn your idea into a functional business before you seek investment.
3. Leave the hockey sticks on the ice
Excite investors about your big picture, but be reasonable and responsible. Avoid hockey stick projections. Respectable investors will not take you seriously if you present them with nonsensical financial graphs that claim your company’s revenues will grow from $100,000 to $50 million in three years. Show investors that you have a grasp on reality with three versions of financial projections: best case, moderate case, and worst case. Base each of these models on facts, past and present performance data, industry and competitor analyses and a series of well-thought-out, defendable assumptions. Take help of experts for this purpose by tying up with a company which offers financial and accounting services.
4. Learn to love discount stores
Being cheap is chic. In an age where spending is out of control, you’ll need to prove that you are a fiscally responsible manager who knows how to get the most out of a buck. Give yourself wiggle room in your operations and marketing budgets, but avoid being excessive. Never ask for a large salary or big-budget perks. Investors want you to be in a position where everything is on the line.
5. Rome wasn’t built in a day. Your business won’t be either
Investors are wary of funding over-eager businesses that seem destined to bite off more than they can chew. Before asking for millions of dollars to fund 50 divisions and hundreds of product lines, prove how well you can create, manage and fulfill the demand for a single product. Demonstrate that your business can crawl before you say it can walk. Perfect your marketing tactics, sales strategies, and operational procedures. Investors appreciate companies with sustainable step-and-repeat business models that are poised for exponential growth.
Remember, even Google’s success is based on a single product.
6. Choose not to be the smartest person in the room
Know what you know, know what you don’t know and find the people who know what you don’t know. Build a team of credible experts. The smartest leaders in the world are those who surround themselves with smarter people. Investors are funding a management team as much as they are investing in a great business concept.