12 Tips for Improving Your Investor Pitch
An investor pitch plays a crucial role in securing funding. To get the best deals from investors, you need a pitch that perfectly captures the value of your business. Here are some tips on creating your investor pitch.
The business world continues to grow as more and more entrepreneurs are stepping up their game. In 2020, there were already 31.7 million small businesses running in the US. This is good news for the economy but a big challenge for business owners.
As the competition heats up, it’s harder to get investors to turn your way. Not only is it hard to find investors, but it’s even more difficult to convince them to invest.
As a business owner, you hold the responsibility of selling your idea. After all, funding is what turns that idea into reality. Hence, it’s imperative you have a flawless investor pitch prepared before getting an audience with your potential sponsors. So, here’s a list of things you should prepare when you pitch to investors.
Tips on Creating your Investor Pitch
1. Create your pitch deck
You have to prepare a presentation for your pitch. A well-made pitch deck will help set the tone for your business pitch.
If you’re not familiar with a pitch deck, it’s basically a short slide presentation that summarizes your business model. It showcases the highlights of your investor pitch such as your products, company structure, and financial strategy. Through it, you will narrate an existing problem and how you plan to solve it.
Keep in mind that your pitch deck doesn’t have to be a grand presentation with fancy effects. What matters most is its content. Here are some legendary pitch deck examples to get inspiration from.
2. Practice your pitch
Don’t be overconfident with your pitch. A lot of things can go wrong with the actual presentation, so it pays to be prepared.
A good presentation is short yet memorable. Rehearsing your pitch beforehand will help you to time it appropriately. Keep in mind that 10 minutes of clear and concise discussion is better than a 20-minute ramble of convoluted thoughts about your product.
Make every minute of your opportunity count by highlighting only the most relevant and important information.
3. Prepare great visuals
A picture paints a thousand words, and it’s a great way to captivate your investors. People better retain things through impressive visuals.
Showing off sleek, clean, and colorful images of the core elements of your pitch are bound to leave a lasting impression.
Take Facebook’s pitch deck, for example, they displayed an image of a profile page which is their main selling point for the social networking site. This gave investors a better idea of what they’re describing in their pitch.
4. Describe the problem
Once you’ve completed your pitch deck and have done all the necessary preparations, let’s move forward with the actual presentation.
Full Scale’s founder Matt DeCoursey would say a business’ goal is to solve a problem. And that is your first order of business; convincing investors of the problem.
In presenting the problem, you have to convince investors of three things. One, it’s urgent. There’s a need for it to be addressed as soon as possible.
Second, it’s worth solving. You have to prove that the issue devastates a lot of people, and in turn, would be a large market. Lastly, it’s solvable. There is something that can be done about it. This will lead to your next pitch: the solution.
5. Describe your solution
Now that you’ve explained the current problem, it’s time to discuss how you plan to solve it.
The biggest challenge in presenting your solution is simplifying it. This is especially difficult when it’s a highly technical product. Avoid buzzwords and jargon unless you’re sure your investors are familiar with the industry.
Keep your explanation short and concise. Make your solution more convincing by laying out the results of previous testings.
6. Define your target market
The next course of action is to introduce your target market. Who are you selling to?
Number one tip in defining your target market is to be specific. Sure, you can say targeting a trillion-dollar industry with big potential for growth. But your product doesn’t cater to the whole scope of need for that industry.
This means you’re only targeting the people who can realistically benefit from your product or service. Hence, you must give a detailed description of your target market such as age, lifestyle, behavior, etc. This will let investors know that you’ve fully thought this through.
7. Explain your business model
Another point to focus on your investor pitch is how you plan to tackle sales.
A business model is your company’s strategy for earning a profit. It describes the value of service you will deliver, at a specific cost. The model would include information about the company’s goods and services, as well as its target market and all operating and production costs.
8. Showcase your track record
A proven track record will give a definite boost of confidence. If you’ve already gained good traction early on, it will be useful in impressing investors.
Come prepared with your numbers. Summarize your financial report in your pitch deck slide. Your investors will want to see your current cash flow to evaluate the progress you’ve made so far. This includes sales forecasts and income statements, as well as projections for the upcoming years.
The more milestones you’ve reached, the better. This proves that you’re not just a potential idea but one that’s already starting to sell.
9. Explain your marketing strategy
How will you reach your target market?
Your investors will want to know how you plan to build up engagement. In today’s modern market, most businesses are tapping into digital marketing. However, you can also plan out a hybrid of both traditional and digital advertising. The key is to create a cohesive strategy that can effectively boost your brand’s presence.
10. Introduce your team
Your product would not be possible without a great team. Be sure to highlight your experts in the presentation. Mention all the unique traits and skills of your current team and the projects they can take on in the future. This is also a good time to share your plans for expanding your staff.
11. Point out your competition
Once you’ve introduced your team, it’s time to introduce who they’re up against. Make a comprehensive report on your competitors.
You can share the findings of your competitive analysis. Discuss your competitor’s performance, their company size, traction, marketing strategy, and more notable details.
12. Describe your exit strategy
One way to focus on the gains is to provide that extra cushion when plans change. Investors are not keen on losing money, hence, you’ve got to promise that a good exit strategy is in place. This is important especially if you’re seeking large investment amounts.
Whether you’re planning for an acquisition, or to offer your firm publicly, you must share the exit plan. This will also explain what your long-term goals are for the company.
Overall, the above-mentioned items are just some tips you can follow to improve your investor pitch. Feel free to get creative. Prove to investors that you know your brand inside out and you can lead it to success.
Scale your Business with Full Scale
Want to get more tips on securing investors? Need help scaling your business? We’ve got you!
Full Scale is a software development outsourcing firm that offers a variety of business solutions. We can assist you in assembling and managing your team. You can focus on improving your core competencies, while we handle all of the time-consuming processes of recruitment and management.
Ready to grow your business? Talk to us!