Pitch Your Business Idea to Investors; At each point in a company’s lifecycle, entrepreneurs must sell their idea, product, or service to customers and prospective investors.
It feels like a giant challenge to explain your entire business in a rigid short timeline like 5 minutes. When it comes to raising investment capital, you never know when a conversation could lead to a cheque. For this reason, entrepreneurs must learn to craft an effective narrative that communicates the company’s value, no matter the setting.
Pitch Your Business Idea to Investors
If you’re an entrepreneur, you need to know how to pitch your business. Even if you’re not planning to pursue funding, having a solid elevator pitch ensures that you know your business inside and out. Also, this comes in handy if or when you eventually decide to seek out investment.
First of all, know that getting your pitch down to a tight timeline like 5 minutes or less IS possible. So don’t despair. It is totally possible to incorporate all the key pieces of information in your pitch to bring your company to life in 5 minutes or even in 1 minute.
So, how do you do it? How can you pitch your company in 5 minutes?
First Impression Matters – 30 seconds
Open with an introduction of yourself, your team, and your company. The pitched idea should concisely summarize your business model and startup vision.
As you walk the investor through the key content to be covered, sound enthusiastic and be passionate. Surprise them with interesting and little-known facts about your industry or company so that they are intrigued and want to continue listening to you.
A rule of thumb is to remain relatable throughout the pitch, as investors may not be familiar with the jargon used in your industry.
The Problem – 70 seconds
After setting the stage, highlight the market gap and justify to investors why this problem is worth tackling. This will engage your audience right out of the gate. And if you’ve done any testing, try to include actual data here.
Draw them in with a story detailing how your target market persona is affected by the problem at hand. Help them understand the complexity of the problem and the urgency to fulfill customers’ needs. This also sets the prelude for you to demonstrate the sustainability of your solution.
The Solution – 90 seconds
This is the time for you to highlight your product’s unique selling proposition and show how you’ll rise above your competitors. Your investor needs to know that your solution is not only innovative but also feasible and lucrative.
You can further support your case with findings from needs analysis and user tests. Favorable market sentiments and a realistic estimate of your market share are strong evidence of your company’s growth potential.
Market Opportunity – 50 Seconds
Ultimately, investors invest to earn returns. They’ll be interested in understanding more about your revenue streams and pricing strategy.
You don’t have to be too specific at this juncture, but you need to convince investors that you have a profitable business model.
Essentially, draw a timeline that outlines the broad steps you will take to achieve a profit–making outcome. Let them know how much capital is required and the specific help you’ll need from them.
Emphasize the addressable market. This is where you make investors realize the potential disruption that you’re causing in the market. While it’s great to be in the billions, be truthful. It’s a number investors will remember and ask about.
Wrap Up- 30+30 seconds
Reiterate the two most significant points from your pitch to achieve impact. Also, be prepared to take questions from here on. Strive to impress investors with your answers so that they’ll arrange to follow–up meetings with you.
Take feedback and refine your pitch…
No matter the outcome of your pitch, if you receive funding, another meeting, or rejection, look for areas to improve. Don’t be afraid to ask for feedback and take that into account for the next time you pitch. Now, if the investor isn’t willing to provide any, don’t push the issue. It is their time you’ve just spent and are asking more of, so it’s a fine balance to achieve.
If you can, have another team member take notes and review with them after the fact. Look for weak points, areas you stumbled over, and slides that led to the investor’s negative reactions. Keep refining, practicing, and executing even if you think you’ve found the perfect pitch.
You’ll really never know how good your pitch is until you actually do it. Don’t stress yourself out, and treat every investor pitch as a learning experience for you and your business. You’ll only continue to get better and better and can apply those learnings to every area of your business.