What does it take to get an investor interested in your startup? 21BY72 has been working with investors from various industries for years, and one thing they all agree on is that your pitch must be excellent in order to receive funds for your dreams.
The pitch is the only chance you get to present your startup to investors. Thus, you should create a unique and engaging pitch. As we organize startup expos and events, we have seen many pitches, some successful and some not. We have put together a list of tips that will help you create a perfect pitch to attract investors.
What is a Startup Pitch?
A startup pitch is an overall presentation where you present your startup in its entirety to the investors. It includes your product overview and business model as well as market research, customer demands, and market traction to build credibility and secure funding for your startup. The pitch and pitch deck are crucial for startups to get investors’ trust and the necessary funds after negotiation in case of equity-based fundraising.
10 Tips for Securing Funding
These are a few essential, successful startup pitch deck tips to enhance your pitch, engage the investors, and increase the probability of raising funds.
Understand your investors
Do you go to an economics professor for a marketing problem? No. Similarly, if you pitch your seed funding idea to a VC who specializes in growth-stage firms, you’re less likely to succeed. Understand the investors before developing a pitch. Furthermore, there are investors who provide mentorship to entrepreneurs. In this way, you can determine if they have the necessary experience and knowledge to help your startup grow and understand your goal.
Here are a few things to ask to better understand potential investors and create a great company pitch:
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What type of investors is your startup pitching to? Angels, VCs, or corporate companies.
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What are the motives of investors when investing?
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Do they have experience in your industry?
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Do they have market credibility for investment and guidance?
Clarify the purpose of the pitch
Pitching is not always about raising funds; it can be about creating partnerships and securing mentorship. When pitching to investors, you must focus on the returns they can secure and the market traction. For partners, you need to structure the startup pitch in a way that focuses on your vision and how their cooperation is valuable to you. On the other hand, when you pitch to industry experts for mentorship, draft a pitch that focuses on the potential of the startup and growth areas for their mentorship.
Keep it concise
As per a study, investors tend to focus only for 3 minutes and 44 seconds. So, you don’t have time to yap your way through the pitch. Instead, create a precise startup pitch deck with relevant information like market traction, growth potential, your business model, teammates, revenue management, and more. Focus on adding relevant stats to ensure your pitch is credible and attracts the investor’s attention. The pitch presentation should be formatted and simplistic. Avoid cluttering and keep the pitch to the point.
Start with an engaging opening
The first impression is the last. However, when pitching to investors, partners, or mentors, the first few minutes will make or break the deal. Just like students in the boring lecture, investors can also tune out of the pitch. They are likely listening to pitches all day, every day.
So, you must start your pitch with a bang or a unique style to attract investors’ interest. Whether it’s a dramatic story (based on reality) or some fantastic stats, you must structure the pitch well for the first few minutes to ensure that the investors pay attention throughout the presentation.
Talk about the problem you identified & solution
The success of a startup depends upon what problem it is solving for the target audience. The pitch should focus on how your startup contributes to society. Investors or partners often consider these to be the primary factors influencing their decisions, especially in seed-stage funding or partnerships in the early stages of the startup. Therefore, talk about the problem you have identified and how your startup has the perfect solution to tackle that issue.
Highlight the statistics for market demand
Investors often seek startups with market demand and a ready-to-target customer base. Therefore, demonstrate the size and demand of your target market. Provide data on market size, growth trends, and your startup’s potential reach. If you have an MVP, showcase its performance in the market and customers’ acceptance of your startup product/service.
Do your homework! (research and traction
A detailed presentation of the market and consumer behavior can set you apart in the highly competitive pitching event. So, do the research and the tedious work of tracking the traction of your MVP. Thus, you can represent the facts and stats to gain brownie points from the startup.
Introduce your business model & teammates
This blog discussed the external factors your startup pitch needs to impress the investors, partners, or mentors. However, a successful startup pitch must include internal factors, including your business model and the team. The business model explains the internal structure of a startup, including the operations, revenue model, marketing strategies, and more.
Your team of experts has the potential to make you break your startup. A skilled team can help you succeed, but the lack of one can fail in the most promising startups. Therefore, you must highlight your business model, your team members’ skills, and their contributions.
Keep it authentic
Investors have the innate skill of smelling lies from miles away. So, avoid fluffing up the pitch by adding baseless facts and stats. It will reduce the probability of securing funding and affect your credibility in the market. Data-based stats and facts are more likely to result in the success of your startup pitch.
Dive into your competition and competitive edge
Ignoring your competition can result in the receivers (investor, partner, or mentor) not paying attention to your pitch. Competition is one of the most crucial components of a startup pitch. If you have one, you must highlight what sets you apart from them and how the receiver gets value by choosing your startup. You must present your logical strategies to tackle the competition.
Conclusion
If you are wondering how to pitch a startup to investors, potential partners, or mentors, we are here to help you. We are 21BY72, an angel investment network, and we have conducted networking events like the Global Startup Summit, including pitching events and startup exhibitions.
We have observed some common mistakes and characteristics that entrepreneurs make in startup pitches. Some of them do not understand the receiving party, create concise pitches, start the pitch with a unique engagement style, avoid business models and teams in the pitch, add fluff or false stats, and more discussed in the blog above.
FAQs
1. How do I write a startup pitch deck?
Each slide in the pitch deck should include an introduction, problem statement, solution, market size, business model, competitive analysis, traction, team, and a clear funding task.
2. How do you pitch startups at pitching events?
When pitching at events, keep your presentation concise and energetic. Engage your audience with a strong opening, focus on your unique value, and highlight your competitive edge. Conclude with a clear ask, and be ready to answer questions confidently.
3. What are the common mistakes to avoid in a startup pitch?
Avoid overly technical language, lack of focus, unclear messaging, fluff or false stats, and unrealistic financial projections. Also, remember to practice your pitch to ensure a smooth delivery.
