How to Pitch to Investors
Can you tell me the most important thing that you have learnt about pitching to investors?
Do not get bogged down in details. Investors are not interested in them in the first meeting. Whenever I presented to investors, I always focused on the main idea and commented on basic things like team. Each founder must be able to explain why what he is doing makes sense to other people, and why they will want to buy his product/service. This must be crystal clear.
So, in your view, the ability to speak simply and comprehensively is decisive?
Yes, I think it is extremely important to be able to choose the right amount of information that you will share. At the first meeting, it is sufficient to explain what is the main idea of your startup and what distinguishes you from others. If the investor is interested, there will be time to go into details later. The worst thing is when one begins to talk too much. People cannot tell what is important and what is not.
How can you express the essence of your business in just a few minutes?
Before you start presenting, you should be sure that you fully understand your business. You have to be able to explain to yourself what you are doing, why, and how you are doing it. When someone asks you how you want to do this or that, you already have an answer to it and you do not have to make things up on the spot. That is why preparation should not be neglected. The investor immediately recognizes whether the person did their homework, and on the basis of that he will decide whether the entrepreneur deserves the investment.
What should you spend the most time on when preparing for the presentation?
On Business and Financial Plan. Most people underestimate the importance of the Financial Plan and either do nothing or something very simple. If the investor is enlightened, he will ask you to edit the plan, but for most investors, a badly prepared financial plan is a no-go. What is also important is a pitch deck, which is a document that you send to investors for review and which you present to investors. The better prepared you are, the greater the chances of success.
How much time should one spend on preparing of these documents?
I would say that the preparation can take 1-2 weeks, but you need to have good sources and materials. It's not like sitting down and writing everything in one afternoon, you have to think and look for information. We were lucky that we had all these documents prepared from one competition. We just had to edit them and then we were able to send them out.
Besides these documents, you still need to prepare an elevator pitch. Can you tell me how to do it?
There is no universal recipe, in any case you will find a lot of advice on how to do a good presentation on the Internet. You can search for inspiration on YouTube where you will find pitches of the most famous companies, which have recently received huge investments. When I attended a training by the US Mac in San Francisco, we focused a lot on the WOW statement.
What is it?
It's a statement which gets someone's attention. Within 30 seconds, you must be able to convey your thoughts clearly, simply and interestingly. If you manage to catch someone’s attention in these 30 seconds, they will give you another 4 minutes of their time, and then quite possibly other 25 minutes. This is how the attention span works. You need to work with it during presentations.
What do you think investors are interested in when you are pitching to them?
Your drive, determination, willingness to dedicate all your time, and the belief that the project will be successful. The investor must see that you will work hard on and that his money will not be wasted. Each entrepreneur should be able to prove to the investor that when he gives him the money, he will work day in and day out to meet the goal. When pitching, founders should make it clear that they care about the growth and success of the company, not immediate earnings. Questions are important, too. One should not equivocate, but speak openly and clearly about potential risks and not pretend to know something he does not.
I wonder what it is like to do an elevator pitch in two people?
It is good. Each one of us understands something else and we complement each other. If one does not know something, the other can add it. We need to prepare to be synchronous to know who says what, but I'm glad we're two.
Could you pass on some recommendations?
- Prepare all the materials (Business Plan, Financial Plan, pitch deck).
- Sign up for a contest and get feedback on your project. The idea makes up 2%, the rest is the execution. Talk about your idea openly with others.
- When presenting, show your enthusiasm and determination.
- Simplify reasonably and do not worry too much about details.