Can anyone pitch their idea to investors without breaking a sweat? Probably not.
There are butterflies in the stomach. There is anticipation, apprehension, hope, and excitement in the air. You may wonder whether your idea will be bought or not, or whether it will be perceived rightly or not. And most importantly, whether it will be funded or not.
Having funds make you and not having funds break you. Even the most promising startups have failed because investors didn’t show enough gumption in their idea.
So what you need is an Elevator Pitch, and you need to nail it. “The first 30 seconds” is what an elevator pitch is all about. If you can succinctly describe your idea in the first 30 seconds, in a way that even a five-year-old can understand and invite follow-up questions, then half of your job is done.
Key questions on which you can base your Elevator Pitch
What do you do?
If you can put it across in one line, without jargonizing things, then you are off to a good start.
What problems do you solve?
Your idea needs to solve the problem. It cannot be self-serving. Here again, you need to be succinct.
For example, an XYZ company can say, “We help businesses in determining the popular elements on their websites by using heatmap technology. It tracks where visitors are looking and what they’re interacting with the most.”
What sets you apart?
The startup ecosystem is not an aquarium but an ocean, and you aren’t only fish. You need to create and explain your USP so that investors don’t move away to your competition.
You need to zero-in on your key differentiator, otherwise, your Elevator Pitch might sound rhetorical. This is the secret to make than initial connect with investors.
You should “Know” who your Investors are
You can also search for investors who focus specifically on your region. Angel Capital Association can be used for this purpose.
The level of involvement in the product varies from investor to investor. Some investors want a seat at the boardroom meetings, others are simply satisfied with quarterly reports.
So if you are pitching your idea at a “Shark Tank Style” event, then you better try to know each investor, as much as you can.
You should be able to answer the following questions:
- What experience do they have with your industry?
- How many other investments have they made in your industry?
- Are they quite and receptive, or are they loud and volatile?
- Are they a part of the Angel Investment Network, or do they function independently?
- Before becoming an investor, what was their area of expertise? Which companies did they work for?
You can search for them on Youtube. They might have given an odd interview. That will be a gold mine for you.
Don’t be an idealist when using data. Keep things realistic.
You need to back your Elevator Pitch by solid data. Investors are evasive to any kind of vagueness. They want to see your accomplishments in terms of data, not perception. They just want to make a profit in the future.
Valuating your Startup is tricky. You just cannot throw numbers without any reasonable backing. Valuation is done even before a startup starts making a profit. It’s largely based on speculation and hypothesis.
Let’s take an example. A firm which is into providing shared workspaces may have a 500% higher valuation than its competitor, who is much better established.
During your Elevator Pitch, use concrete numbers. So if you are talking about acquiring new customers, then tell exactly how many customers you will acquire. It can be 10 or 10,000, but your clarity and transparency will impress investors.
Learn about Storytelling and use it in your Elevator Pitch
Telling a good story always works. If you observe, it is working for professionals on Linkedin too, as they are growing their network just by telling their stories.
Most of the branding done is centered around storytelling only. Your Elevator Pitch should be no different.
You don’t have much time in front of investors, but whatever it is, try to weave a story and garnish it with a few facts.
For example, you can use a classic technique of using a protagonist and antagonist, to illustrate your product. You can be the protagonist, who got inspired to start his own company, and all the roadblocks along the way can be the antagonist.
There can’t be an Elevator Pitch without a succession plan
Your passion might help you give a stellar speech, but investors won’t fork over their money based on your passion alone.
And it’s not just about laying the roadmap, by keeping yourself at the center of things. You must share the succession plan as well.
History vouches for this. Having succession plans greatly increase (3x) the revenues of companies. They reduce risk and set a foundation for long-term growth strategies, as there is a documented procedure in place.
They show that you deeply care about the product, and are not fixated with the one who will take it forward.
Ideally, your succession plan should include these key components:
Who will be the successor?
It’s pretty obvious. You should name the person who will take over the reins of the company after you. He or she may get replaced with someone else later, but you give a name from your end.
You can list the person’s accomplishments, current role, and what make him or her a good fit.
How will be the transition handled?
Transferring a product to someone involves some serious transition. There can be a difference in the working styles, or in the perception of the product.
For your protege to learn the ropes, you need to work closely with him or her. Discuss what your strategy will be regarding this with investors. This will create a positive image of yours.
What will be your hiring strategy?
In most cases, it’s the VP that takes over as CEO when the succession happens. So you need to fill the vacated shoes. You need to have a sound hiring strategy, to bring in people that can match the mettle. You can refer to one of our write-ups on hiring strategy to understand it better.
In a way, it’s easy because you know how a person functioned in the capacity of a VP and what were the challenges. It’s better you give some space to your hiring strategy in your pitch.
It again shows that you care about the company’s future and growth and that you are not just passionate about it but have a definite plan in mind.
A successful Elevator Pitch shouldn’t lose its focus on numbers, storytelling, and value proposition. You should curate your presentation that way. Make sure your slides cover these three aspects in equal proportion.
Don’t take it as just another presentation in your life. Be ready to face some chin music. Some investors might ask tough questions.
Investors sitting in that room will have their own perceptions of success, but it’s important that you show conviction in your perception. Your intent and your ability to see the bigger picture is what matters.
We hope this write-up helps you with your next big pitch. You can also refer to this guidebook to learn more about Sales pitch. Feel free to drop in your questions and doubts regarding Elevator Pitch.