You have 7 minutes on average to pitch your idea to investors, and another 3 for the Q&A. The attending investors hear dozens of projects like you. Your goal is to convince them that you’re the one they should give their money to. How are you planning to do that? The timer’s on.
Investors care about three things regarding startups: Strong founders, a big market, and a realistic business model. Everything else can change as you go because change is the nature of startups, and investors know that. So, you have to make sure you’re focused on the big stuff.
Prepare
If you want your presentation to stand out, you have to prepare everything repeatedly before each pitch. Every audience has its views, interests, and motifs. The better you know your audience, the better you can target and attract them.
1. Research your audience
Gather as much information as you can about the investors you’re about to pitch. There are three things that cause investors’ emotional involvement:
They’ve experienced the problem first-hand;
There is a good indicator of getting their investment back;
The project is close to their professional experience. For example, a healthcare project to a doctor.
Find the point where at least one of the points intersects with your idea. This will be the point you’ll have to bring out.
2. Edit your pitch deck
After you research your audience, look over your deck. How well does it apply to the current situation? If you find it necessary, create a duplicate of the deck and edit it as needed. This might be the example you’re using, the sequence of the slides, etc.
If you don’t have a pitch deck yet, have a look at our guide and build the first tangible document of your idea.
3. Have a customer survey
It’s always a good idea to have a small survey with your customers, not only for your pitch but also for your product development. If you don’t yet have customers, create a test group from your friends, family members, and coworkers. Ask them what problems they stumble upon while using the same services and what would they like to change; Does your value proposition solve existing problems and serve their needs?
One of the biggest fear of investors is the thought that your product is based on what you think is wanted and not — what is. Having a survey of potential customers or a test group with you is a great way to diminish this fear. Talk about real people who are trying to get what you’re offering with worse tools than you have; or about those who are paying more to get what you’re offering for less.
4. Be explicit with your request
No matter who you’re presenting your idea to, you always have an understanding of what you’re asking in return. In this article, we’re focused on pitching your idea to an investor, but it also might be an accelerator, potential partner, employees, or even customers.
Think through what you’re hoping to get in front of every pitch. The more specific your request will be, the greater chance you have for getting it. Investors likely won’t try to guess what your goal is; you are the one who has to deliver that message.
5. Get ready for a hard Q&A
Finishing your pitch is not the end of it. You’re always followed up with questions, and although it may seem a spontaneous effort, it is not. Write down up to 20-30 questions you’d ask yourself. Make them as hard as possible. Then answer them.
A good practice is showing your questions and answers to your friends and mentors. Ask them if they can come up with a question you might have missed.
Now, let’s move on to the pitch
This is where the real preparation starts. You need to practice your pitch as often as it takes to grasp it fully. Of course, learning the text by hard won’t do you any good. That’s why it’s so important to have a good understanding of what makes a good presentation.
State clearly what you’re building
Paul Graham is the co-founder of the most popular startup accelerator, the Y combinator. His main job is to see through the pitches and to discover the next unicorn. Paul advices to explain what you’re doing in the first sentence of your presentation:
“Before they can judge whether you've built a good x, they have to understand what kind of x you've built. Say what you're doing as soon as possible, preferably in the first sentence.”
This way, your audience is caught up with your idea from early on. The remaining part of the pitch is devoted to the building blocks of your company.
Problem, solution, and product
We’ve talked about this in more detail in our article about creating a powerful pitch deck, but we’ll explain it in short here, too:
The problem has to be understandable, obvious, and relevant, and your solution to it. That’s all.
As for the product, nothing works better than its direct demonstration. If you already have the prototype of your product, this is the moment to show it. If not, it’s a good idea to create a visual example of it with a designer’s help or simply by yourself.
State clearly, why now
Choosing the right time is just as important for your startup’s success as a great team. Investors are interested in why now is the right time to build what you’re building.
Find a shift in the market that made your idea possible to build. The newer this shift will be, the better. This means that no one, or only a couple, has noticed it.
State clearly, why you
There’s a big chance you’re not the first one to have come up with the idea. Why does your startup deserve attention over others? The answer to this question is in the team. What do you and your teammates have that sets you apart from others?
Be honest and true
Even though the temptation to modify the truth is big, you have to resist it. Being honest is always a safer way to play. Of course, You have to avoid talking about your company’s weaknesses, but you can’t lie when asked about them.
If you’re a developer who lacks business skills, present yourself as a good developer rather than a fraudulent businessman. People sense lies, investors, especially.
Paul Graham offers a recipe for persuading investors. It’s not an easy thing to do, but it sure is straightforward:
Make something worth investing in.
Understand why it's worth investing in.
Explain that clearly to investors.
It’s hard to argue with his recipe. As you see, the main focus is on creating a truly valuable product. The second step is to make yourself believe in that value:
“If you're saying something you know is true, you'll seem confident when you're saying it. Conversely, never let pitching draw you into bullshitting. As long as you stay on the territory of truth, you're strong. Make the truth good, then just tell it.” — Paul Graham.
How to pitch investors
06 October 2020You have 7 minutes on average to pitch your idea to investors, and another 3 for the Q&A. The attending investors hear dozens of projects like you. Your goal is to convince them that you’re the one they should give their money to. How are you planning to do that? The timer’s on.
Investors care about three things regarding startups: Strong founders, a big market, and a realistic business model. Everything else can change as you go because change is the nature of startups, and investors know that. So, you have to make sure you’re focused on the big stuff.
Prepare
If you want your presentation to stand out, you have to prepare everything repeatedly before each pitch. Every audience has its views, interests, and motifs. The better you know your audience, the better you can target and attract them.
1. Research your audience
Gather as much information as you can about the investors you’re about to pitch. There are three things that cause investors’ emotional involvement:
They’ve experienced the problem first-hand;
There is a good indicator of getting their investment back;
The project is close to their professional experience. For example, a healthcare project to a doctor.
Find the point where at least one of the points intersects with your idea. This will be the point you’ll have to bring out.
2. Edit your pitch deck
After you research your audience, look over your deck. How well does it apply to the current situation? If you find it necessary, create a duplicate of the deck and edit it as needed. This might be the example you’re using, the sequence of the slides, etc.
If you don’t have a pitch deck yet, have a look at our guide and build the first tangible document of your idea.
3. Have a customer survey
It’s always a good idea to have a small survey with your customers, not only for your pitch but also for your product development. If you don’t yet have customers, create a test group from your friends, family members, and coworkers. Ask them what problems they stumble upon while using the same services and what would they like to change; Does your value proposition solve existing problems and serve their needs?
One of the biggest fear of investors is the thought that your product is based on what you think is wanted and not — what is. Having a survey of potential customers or a test group with you is a great way to diminish this fear. Talk about real people who are trying to get what you’re offering with worse tools than you have; or about those who are paying more to get what you’re offering for less.
4. Be explicit with your request
No matter who you’re presenting your idea to, you always have an understanding of what you’re asking in return. In this article, we’re focused on pitching your idea to an investor, but it also might be an accelerator, potential partner, employees, or even customers.
Think through what you’re hoping to get in front of every pitch. The more specific your request will be, the greater chance you have for getting it. Investors likely won’t try to guess what your goal is; you are the one who has to deliver that message.
5. Get ready for a hard Q&A
Finishing your pitch is not the end of it. You’re always followed up with questions, and although it may seem a spontaneous effort, it is not. Write down up to 20-30 questions you’d ask yourself. Make them as hard as possible. Then answer them.
A good practice is showing your questions and answers to your friends and mentors. Ask them if they can come up with a question you might have missed.
Now, let’s move on to the pitch
This is where the real preparation starts. You need to practice your pitch as often as it takes to grasp it fully. Of course, learning the text by hard won’t do you any good. That’s why it’s so important to have a good understanding of what makes a good presentation.
State clearly what you’re building
Paul Graham is the co-founder of the most popular startup accelerator, the Y combinator. His main job is to see through the pitches and to discover the next unicorn. Paul advices to explain what you’re doing in the first sentence of your presentation:
“Before they can judge whether you've built a good x, they have to understand what kind of x you've built. Say what you're doing as soon as possible, preferably in the first sentence.”
This way, your audience is caught up with your idea from early on. The remaining part of the pitch is devoted to the building blocks of your company.
Problem, solution, and product
We’ve talked about this in more detail in our article about creating a powerful pitch deck, but we’ll explain it in short here, too:
The problem has to be understandable, obvious, and relevant, and your solution to it. That’s all.
As for the product, nothing works better than its direct demonstration. If you already have the prototype of your product, this is the moment to show it. If not, it’s a good idea to create a visual example of it with a designer’s help or simply by yourself.
State clearly, why now
Choosing the right time is just as important for your startup’s success as a great team. Investors are interested in why now is the right time to build what you’re building.
Find a shift in the market that made your idea possible to build. The newer this shift will be, the better. This means that no one, or only a couple, has noticed it.
State clearly, why you
There’s a big chance you’re not the first one to have come up with the idea. Why does your startup deserve attention over others? The answer to this question is in the team. What do you and your teammates have that sets you apart from others?
Be honest and true
Even though the temptation to modify the truth is big, you have to resist it. Being honest is always a safer way to play. Of course, You have to avoid talking about your company’s weaknesses, but you can’t lie when asked about them.
If you’re a developer who lacks business skills, present yourself as a good developer rather than a fraudulent businessman. People sense lies, investors, especially.
Paul Graham offers a recipe for persuading investors. It’s not an easy thing to do, but it sure is straightforward:
Make something worth investing in.
Understand why it's worth investing in.
Explain that clearly to investors.
It’s hard to argue with his recipe. As you see, the main focus is on creating a truly valuable product. The second step is to make yourself believe in that value:
“If you're saying something you know is true, you'll seem confident when you're saying it. Conversely, never let pitching draw you into bullshitting. As long as you stay on the territory of truth, you're strong. Make the truth good, then just tell it.” — Paul Graham.