Pitching your startup to investors can be a daunting task. For many founders (even those of successful startups!), learning to successfully pitch investors is their biggest challenge to date because you only have a few minutes to capture an investor’s attention and convince investors that your startup idea is worth their time and money.
In this blog post, we will walk you through the basics of creating a winning startup pitch to investors. We’ll cover what a startup pitch is, what should be included in your pitch, and keys to making a successful pitch that gets investors to write that crucial check for your startup.
What is a Startup Pitch?
Your startup pitch is a presentation given by startup founders to potential investors, usually venture capitalists or angel investors. The goal of the pitch is to secure startup funding for your startup.
Startup pitches typically last between five and 20 minutes, and they should be clear, concise, and well-organized. Investors will want to know the key information about your company: your business model, your target market, your competitive landscape, your financial projections, and your team.
Think of the pitch as a high-level overview of your business plan that you’ve tailored to engage future investors. The perfect pitch will include enough detail to pique their interest for further conversation without overloading them, and it is a key element to How to Raise Venture Capital.
Remember: Your startup pitch should be tailored to your target audience. It’s important that you communicate that you’re trying to solve a problem that they care about so they start to engage on a personal level. When startup pitching, be sure to do your homework on the investors you’ll be pitching to so that you can customize your presentation accordingly. Learn more about startup sales strategy.
Check more details about How Do Angel Investors Work?
What Should Startup Pitch Include?
There are a few key elements that should be included in every startup pitch:
– The problem your startup is solving: What need are you filling in the market?
– Your solution: How does your product or service solve the problem?
– The market opportunity: What is the opportunity? What is the market size? And is it a big market?
– The business model: How will you make money? What are the revenue streams in your business plan?
– The customer acquisition strategy: Who are going to be your prospective customers? How are you going to reach those potential customers? What are the customer acquisition costs going to look like? And who is your ideal customer?
– Traction: How far has your team already gotten? What can you show that proves your business idea has product-market fit?
– The competitive landscape: Who are your competitors and what is your competitive advantage? Are other companies developing similar technologies or offering similar products?
– The team: Who is on your founding team and what relevant experience and industry expertise do they bring to the table? Who are your key employees and what is the value they bring? Don’t forget to toot your own horn! (And your team’s!)
– The financials: What are your expected revenues and expenses? By presenting complete and thoughtful financials with your pitch, it shows that your startup team has thoroughly considered the financial implications of its business idea and that its financial management can be trusted. Let your numbers speak to the success of your business!
12 Keys to Pitching Your Startup Idea to Venture Capitalists
Now that we’ve covered the basics of what a startup pitch is and what it should include, let’s take a look at how to make your pitch successful. Here are twelve keys to keep in mind when pitching your startup idea to investors.
Be Prepared for Your Potential Investors
This may seem like a no-brainer, but it’s important to do your homework before meeting with investors. Which investors are the target audience for your pitch?
Not every investor will be a good fit for your company. Most investors only write checks of a specific size. Other investors only invest in specific industry that they have experience or special interest. And then certain investors are only interested in investing in a very specific kind of technology. Before your start pitching, be aware of the venture capital advantages and disadvantages, and the advantages and disadvantages of angel investors.
Find out which investors are a good fit for your company and business, and make them the target audience for your pitch!
And then research the investors you’ll be pitching to and tailor your presentation accordingly. Are they interested in your industry? Specific technologies that you’re developing? Or maybe there’s something in their personal experience or family history that could get them interested on a personal level?
No matter what, though… Know your numbers inside and out – you should be able to answer any questions about your financials without hesitation.
Create a Visually Engaging Investor Pitch Deck
Your pitch deck needs to be visually engaging. Remember that you’re trying to capture and hold the attention of busy investors, so don’t overload your venture capital pitch deck with too much text or tiny fonts. Your want your audience to be listening to YOU … and not trying to read along with your pitch deck.
Use high-quality images and graphics, and make sure your pitch deck is well-designed. If you don’t already have a graphic designer on your team, Upwork and Fiverr can be excellent resources to find an affordable freelance designer who works on pitch decks. But even if you’re DIYing your pitch deck, Canva can help you create the graphics for a good-looking pitch deck. The Peloton pitch deck and the Tesla pitch deck have excellent examples of eye-catching graphics.
If you’re putting together your first pitch deck, check out our article on How to Create a Venture Pitch Deck and the pitch deck examples we’ve assembled:
Set the Table for Your Pitch
Before you start your pitch, take a few minutes to set the stage. Starting with a brief elevator pitch that outlines what you’re doing and how can you came up with your business idea can give some context about the problem your startup is solving and why it’s an important problem to solve.
Your elevator pitch is an important tool to give your audience enough information to ready for all the information that you’ll be giving them in your pitch. Without a solid elevator pitch, you risk overloading or confusing your audience., especially if you’re in a niche market that they’re not familiar with.
Tell a Compelling Story
Investors are looking to invest in companies with a compelling story that get them invested in your success. What makes your startup unique? Why are you the best person to solve this problem? Be sure to answer these questions in your pitch.
That story needs to combine two stories. First, the business story: how this is a product/service that meets the needs of your target market, how your company has started acquiring customers who love your produce/service, and how now is the perfect time to invest to grow the business.
And the story also needs to include your founder story: why you (and your co-founder(s), if applicable) are the perfect team to make the business a success!
Hit the Key Points
While you want to tell a story, it’s also important to hit the key points that investors are looking for: the problem you’re solving, your solution to the problem, your team, your business model, your market opportunity, and your financial projections. An investor needs to see you hit each of these points, so they can quickly evaluate whether your company is something that they could be interested in investing in. For an excellent example of hitting key investor points, check out our Brex Pitch Deck Breakdown.
Investors usually describe it as a checklist that they keep in the back of their heads while they’re listening to startup teams pitch. If a team doesn’t hit every point on the checklist by the end of the pitch, the investor’s answer will be, “No”, so make sure you hit everything you need to in your pitch.
Make It About the Investor
Your pitch should be about the investors – not about you. They’re looking to invest in a company that will make them money, so focus on how your startup will generate a return on their investment and what the time frame for that return will be.
For many investors, that will include outlining an initial exit strategy which will allow the investors to “cash out” their investment and the time frame involved. Because very few companies achieve an initial public offering these days, that exit strategy is usually acquisition by a larger company, so you may be asked what companies are possible likely acquirors for your business.
Be Passionate About Your Business
Investors are looking for founders that are passionate about their idea. Show them that you believe in your startup and its potential for success.
Building a business is hard, REALLY hard, so investors need to know that you aren’t just in it for an eventual payout. They want to know that you feel passionately about solving this problem, and will be sticking with it when the inevitable issues start popping up!
Keep It Short and Sweet
As we mentioned before, startup pitches typically last between five and 20 minutes. This is not the time to get into the nitty-gritty details of your business – you’re just trying to give investors the short version of your business plan.
For many founders, it’s easy to get caught up in the all the exciting details of what you’re doing: upcoming features, opportunities, key hires, etc., but unless the investor you’re speaking to is already very familiar with your business plan for some reason, it’s almost certainly going to be too much information in a first conversation. It takes extra effort, but be clear, concise, and to the point.
What Are You Asking for? And Why?
When you approach investors, it’s important to close your pitch with a clear “ask.” What exactly do you want from the investor? A check? Advice? Introductions to potential customers or partners?
Whatever, it is, be clear about what you’re asking for! Because if you are not clear about what exactly you want from an investor, they may not know how to respond
Too many founders go to slave over their business plans, sweat over every bullet point of their deck, and drill their pitch until it’s letter perfect, but then forget to actually ask for anything.
That usually just leaves investors confused about what to do next.
Don’t be that founder! Make a clear ask.
For most businesses, the ask will be for money, in which case, you should also describe what the money will be used for. Key hires and additional support team, tech development, and marketing spend are just some of the common “Use of Funds” scenarios in successful pitches.
Most importantly: why should they invest in your startup? Be prepared to answer this question and you’ll be on your way to a successful startup pitch.
Answer Questions Honestly
You’re sure to get questions from investors after your pitch. Be prepared to answer them honestly and thoughtfully – remember, they’re looking for a business they can trust.
And if you don’t know the answer to a question, it’s much, much, MUCH better to be forthright that you need to consult with the team, but will be following-up with the answer than trying to bluster your way through an answer.
Speaking of follow-up…
After your pitch, be sure to follow up with a thank-you note or email. This is a good opportunity to reiterate why you’re a good investment and how you plan to use their money to grow your business.
Also, if there were any questions or concerns that needed follow-up, DO IT. It will show that you are a startup founder who can follow-through on outstanding issues which is key to developing the kind of relationship with an investor that leads to an investment.
End on a High Note
As with any presentation, you’ll want to end on a high note. Thank the investors for their time, reiterate why you’re a good investment, and let them know how to get in touch with you.
And then follow-up! Your pitch is just the beginning of the conversation. If your pitch went well, it will kick off a series of questions, answers, and getting comfortable with each other.
This Is About a Long-Term Startup-Investor Relationship
And remember … as much as these conversations are about the investors deciding whether they like you and your business enough to invest, these conversations are also about you: whether you like the investor, what they would be bringing to your business, and whether you’re ready to jump into a long-term business relationship with them.
So take your time, get to know each other, and ask lots of questions. If it feels right, then you’re on your way to startup success!