Funding Essentials | Here Are 6 Things You Need To Know About Pitching To Investors
The first time we went for a meeting with an investor, it was disaster. We did not really walk into the meeting with great hopes, but we were unprepared for the realization of how little we knew about funding. Raising money for your business is tricky business – this cliche is an understatement. The internet is swathed with “How-to’s” on every bit of the fund-raising process. What all these articles do not, however, tell you is that the actual experience is like being thrown to the sharks after a dip in a bathtub filled with blood. Fortunately, there were some saner voices, some online and some offline, that helped us refine our pitch. Here are those voices consolidated into 10 brief pointers.
1. Be Concise
Your pitch deck is one of hundreds, probably thousands that the investor might view. Most pitches allow 5 minutes presentation time and 2 minutes of Q&A. Flip the numbers. Take 2 minutes to speak and 5 minutes for Q&A. If you can’t explain your business/venture in 2 minutes then you can’t explain it in 5. Also leaving more time for Q&A tells the investor that you value their questions and time as well.
2. Don’t Talk Funding
The goal of your pitch deck is to get the investor interested enough to call you back for a meeting. It is NOT to raise funds. As such your pitch deck should solely concentrate on talking about your business and its value proposition.
3. The 10 Seconds Rule & The Punchline
When we first started out, our first slide said “The Huffpost for Stories”, which essentially bracketed our business into a media/publishing venture. Many startups make the same mistake of comparing their venture to another successful business. Mistake because, while doing so, you set up a pre-conceived notion in the investor’s mind at the outset. If your model is indeed identical to the venture you have used for comparison, then go ahead. If not, then spend time and come up with an independent tagline that conveys and encapsulates what YOU do.
4. Stori-fy It
It took us many pitch attempts before we realized that our pitch did not reflect our own ideology – ‘Storify-ing knowledge’. It takes an average of 20 seconds to read a story, much less time to tell it through pictures (data from Tell-A-Tale’s Google Analytics). And yet here we were, creating 10 absolutely boring, done-to-death slides with text and charts and numbers. When this “Eureka” moment happened, we managed to condense 8 slides into 2, without losing an ounce of information.
5. Know Your Competitors
It is important to not just know WHO your competitors are. You also need to know WHAT their numbers are. Take that into account when you create your own projections. Understand the effort you need to put in to grow the market, or acquire their customers. Explain how and why you are different.
6. Talking About The Team
While most pitch deck templates ask you to put this in, it is not really critical. Remember the 2 minute rule. If the person across the desk is interested in your venture, the team will come up as a point of discussion in either the Q&A or subsequent meetings anyway. So skip it.
These are some things that have worked for us. We hope they prove useful to you as well.
Also check out Do’s and Don’ts of Crowdfunding Your Startup
What are your experiences and tips for entrepreneurs looking to raise funds? Share with readers in the comments below.