The 10 minute investor pitch

We often only have 10 minutes (or less) to do an investor pitch and to share our business idea.

Alway remember: the core purpose of an investor pitch is to stimulate interest and to get a second (detail) meeting.

If you can get someone who doesn’t understand your business to grasp what you’re communicating in your  pitch, then you have a good shot at being effective. Don’t try “Dumb it down” your audience will pick up the condescending attitude and react negatively. The key is to make it understandable, in terms they can relate to.

Cut the jargon and use analogies that are more universal. E.g. in a movie pitch you may say “It is Terminator meets the Karate kid.” or the Netflix of Personal development. Two ideas they already have an idea about. Known brands can be a heuristic (shortcut) to understanding. You can then build on these concepts. Some of the worst pitches are filled with acronyms, jargon and have far too much technical detail.

We buy into ideas and people emotionally, and then we justify our decisions intellectually.

To  inspire buy-in to your investor pitch :

  • Speak authentically from the heart
  • Have a clear and relatable take-away idea
  • A clear call to action  
  • Use real customer stories
  • Practise your pitch until your timing is impeccable
  • Make sure your presentation is crystal clear.

Keep your investor pitch short, sweet, and to the point. We always underestimate the time as it takes longer to deliver an idea to an audience. In practise it always take longer than we think as audience reaction/interaction takes up time. There is nothing worse than asking for 10 minutes of the investor’s valuable time, only to ramble on and still be on the 5th slide 20 minutes later.  Investors will want to be able to check up on your claims, so have a well structured business plan available so investors can read more if necessary.

Top investor pitch tips:

1. Share a real customer story (The challenge)

Open your pitch by telling a real customer story that addresses the challenge your product or service solves in the marketplace. If you can relate your story directly to your audience, even better! Avoid using buzzwords and tech talk when telling your story, keep it simple and relatable. Use specific details, real names and real customer challenges. Ultimately it is the stories you tell that your audience will remember after they walk away, so make sure you have a few compelling customer stories ready to share. Refine the stories down to the essential details. Slow down, don’t race through your pitch and try address every aspect of your business plan in one shot as it makes you seem anxious and nervous. Take a breath and realise that when giving a pitch – less is more. Prioritise the key takeaways you want to stick and keep it simple. Slowing down and sticking to your core message will help you deliver a more compelling and thoughtful pitch.

2. Share your unique solution

Share what is unique about your product and how it will solve the issue you shared in your story. Keep it short, relatable, and easy for your audience to explain to others. Avoid using jargon and industry buzz words. Too many entrepreneurs are product focused when instead they should be customer focused. Keep your pitch deck customer focused and you’ll tell a better story.

3. Outline your market, customers and revenue model

Your business model shows how your idea converts into an economically viable business. Be realistic about who your market is, how you convert customers and how you get paid. It is useful to break out your market into TAM (Total Available Market -everyone you wish to reach with your product), SAM (Segmented Addressable Market -the portion of TAM you will target) and SOM (Share of the Market -the subset of your SAM that you can realistically reach). This demonstrates your market knowledge and helps you think more strategically about your roll-out plan. Investors tend to to place a lot of weight on this section. In a few short bullets, you should be able to answer these key questions: What do you sell? To whom? How much do they pay? and How do they pay you?

4. Talk about yourself and your team – what have you done lately?

Investors invest in people first, and ideas second. Here it is okay to share some of you accomplishments – particularly if they relate to what it takes to start and scale a venture. Whenever possible show the investors why you (and  your team) are the right people to lead this venture. Share the successes your team have had since the inception of your company. Investors want to know about your first customers, other investors, key media coverage, signed letters of intent to purchase/partner, product and customer milestones, key hires, etc.

5. Address the competition head-on

Never say “I don’t have any competition.” Everyone has competition, even if it is indirect. For example when Henry Ford built the Model T motor car, his competition was horses, trains, and walking. Your Competition is an essential important part of your pitch, and is an opportunity to demonstrate your understanding of the market and to differentiate you from your competitors. A great  way to demonstrate your Unique Selling Proposition (USP) is in a matrix format. This is where you list your company and your competitors down the left side of the page, with features/benefits across the top. Place a check mark in the boxes for which each company offers that service. Ideally, you have check marks in each category, and your competitors lack in key areas to visually show your competitive advantage.

6. Share the numbers behind your numbers

Don’t say you’re going to be a $100 million business in 3 years, as most investors won’t believe it (unless you’ve done it before in another company). A more persuasive approach is to show exactly how you will reach those numbers. You must explain your numbers by sharing your assumptions. You want to see investors take out their phones and begin crunching the numbers.

7. Show your product!

It is amazing the power a tangible demonstration can have on the overall effectiveness of your pitch. If your product is not yet built, show mock-ups or prototypes.

8. Share your funding needs

How much money has already been invested in your company, by whom, ownership percentages, and how much more you need to go to the next level, and what the next level is.

 

 

Follow me

Richard Riche

Engagement and communication specialist at One Clear Message
Richard specialises in helping you build real human communication skills.TED style speaking and presentation skills, Emotional Intelligence skills, Employee Engagement/Experience, building high performance teams and a great place you want to work. One Clear Message offers training, consulting and coaching.
Follow me
Share the knowledge

Leave a Reply

*

This site uses Akismet to reduce spam. Learn how your comment data is processed.

Contact us