It’s more important for the right people to say yes, than for everyone to say yes
The long history of entrepreneurship is filled with great ideas that ended up in the garbage bin because of the lack of funding. To this very date very little has changed. Sure, the circumstances for founding a startup may be more favorable than ever before, but if you are not able to knock out the investors, they will worth very little. Let us see then what experts from various business fields have to say about pitching the startup to investors and how these tips can help you to bring your business into existence.
Keep the Things Concise
According to Chris Sacca, veteran VC, the optimal version of your pitch should not last more than 2 minutes. During those 2 minutes you should go through the topics like the nature of your business model, what makes you uniquely qualified to pull off the idea you have brought on the table, what sets you apart from the competitors, and, of course, the things regarding the startup funding. Also, try to be as precise as possible in regards to the money you are going to ask. If you are, for example, raising 1.8 million don’t try to ask for a sum between 1.5 and 2 million.
Elaborate the things That Matter
Still, being concise doesn’t necessarily mean breezing through topics that should be, by any means, elaborated. Well, at least as much as the short time-frame allows you. Brian Cohen, chairman of the New Your Angels claims that the investors are very interested to hear more about the market trends that are driving the product, what will be your main revenue stream, and how the investment will be spent. Come up with some interesting fact or a piece of trivia and you are ought to make a good impression.
Show that You Have Everything Covered
When founding a startup, entrepreneurs face some very critical financial and tax issues. Judging by Kris Parad, one of the people behind Pherrus Financial Services, these issues can range from inaccurate or missing BAS, to operating at unsubstantional loss and mishandling the income statement. All these problems can warrant the ATO audit or something even worse. If your pitch covers some of these critical issues, or proposes cooperation with some third party to prevent them for occurring, the investors will know that their money will be handled in a conscious way.
Research the Investors
“It’s more important for the right people to say yes, than for everyone to say yes”, claims Reid Hoffman, co-founder of LinkedIn and venture capitalist. In order to impress those right people, you should do your best to look through their previous track record and try to discover what made the business they have backed before worth their attention, claims Hoffman. Once you are done with the research you will know how to crack the investors that initially show excitement for your product or start asking interesting questions. Try to be as honest about some more problematic areas of your business as possible, because it will help you build confidence and appeal to the willing even easier.
Learn from Other’s Mistakes
According to Mark Cuban, owner of the Dallas Mavericks and co-founder of 3Com, you have to know your product and the entire industry cold. “The biggest error I see in startupts that pitch to me”, says Cuban, “is no sense of history”. He further elaborates that there is huge number of pitches that eventually failed, but there is no detailed record of them on internet. Entrepreneurs are sometimes not even aware that their ideas have been tried before and failed. Cuban suggests that if you want to pitch such idea you should at talk with people who have been around to learn how to make the idea work.
These days, finding a proper investor just may be the hardest part of founding a startup. Of course, the secret of winning over the investors lies in a good pitch. Use the tips we gave your to come up with the best pitch in the world – The competition will be hard, and every little trick you can pull off can do nothing but help you.