Our 10 tips for entrepreneurs and startup founders who want to sell their idea to a potential investor
Pitching to potential investors is one of the startup founders’ primary tasks - to the dismay of many of them. No one likes to go out in front of a crowd, even if it’s composed of merely a handful of people, and be judged by it. However, selling is one of the key competencies a founder should have and this is precisely why pitching is still not a thing of the past. Investors want to see a CEO with both a passion for the subject and the ability to sell the product. Luckily, here at BattlePass Studio, we’ve gained significant know-how over the years in regards to presenting one’s project to VCs and we can share some of it with you.
Find the story
The very first thing you need to do is think about the way you’ll introduce your business to the world. Never forget that you are not just selling an idea, but also the story about you and the team behind the project. As we’ve said time and time again - people invest in people. Be careful though, you shouldn’t tell your audience fairy tales, but you do need to impress them and present them a plot that would captivate them.
Create your deck
There is no better way to structure your thoughts than to start off with a pitch deck. If you have no clue how to create one, feel free to contact us. Every slide represents a crucial side of your business that puts a new piece to the puzzle. Most decks have a standard structure and you shouldn’t try to be too unconventional with it or you risk to be misunderstood. Investors have limited time and short attention spans. They need to know ‘what’, ‘why’, ‘by whom’ within a few minutes or they lose interest. Therefore, you need to be to the point and you can only add one or two slides that are out of the ordinary (tops).
Learn your project inside-out
You need to be thoroughly familiar with every single aspect of your project. There shouldn’t be a single figure you don’t know or detail you don’t fully comprehend. Don’t just learn by heart, trying to recite it but be able to deliver the information in various ways. Nonetheless, convey the information, using plain language. If your listeners get confused, you will most likely lose their attention.
Watch videos of other people who pitch, especially from your industry, and get prepared to answer the most common questions investors usually ask. The Q&A will be the most difficult part of your pitch as you may be caught in a tight spot. Don’t worry though - more often than not, the lack of questions is a bad sign, so be glad if they want to know more from you.
Test with the rest
After having practiced your pitch in front of the mirror enough times, go for it in front of friends or coworkers. You’d be surprised to find out how nerve-wracking even talking to a familiar crowd could be. Do it again and again until you’ve taken out all of the ‘hmm’s and ‘aaagh’s from your speech. If you have inserted a joke somewhere, make sure to find the right intonation and insert the perfect pause. Play around with your presentation skills - don’t talk in a monotone voice that would put everyone to sleep, change the dynamic so that you keep everyone curious.
The time has come. Start breathing. Meditating right before such events can have an extremely positive effect on your mental state. You immediately calm down and get better clarity - not to mention that you avoid having a panic attack. Take 10-15 minutes to do it shortly before you show up in front of the investors. Furthermore, remind yourself that it is not the end of the world if you don’t manage to close the deal. Life presents you with plenty of other opportunities.
Have you ever been in a situation where you needed to listen to someone nervously performing on stage? If not, you should have at least watched such videos. The mental state of the person in the spotlight is contagious. If they are feeling unease, this anxiety is being transmitted to the public. Likewise, if they genuinely enjoy their time on the stage (think of Eddie Murphy doing standup) then the spectators feel energized and entertained as well. The lesson is simple - try to enjoy yourself as much as you can. Put on a show (but don’t be a clown), make the viewers want to interact with you after the curtains close. Which leads us to our next point.
Oversell (but don’t lie)
Remember, you are selling your project and yourself. Present your product as the most amazing opportunity these investors have ever stumbled upon and create a sense of urgency. If not them, then someone else will make the right decision to write you the check you’re looking for. Be confident that you are the next Uber. If they miss on you, they miss big time. Even the dullest-sounding project in the world can be compared to something big and sexy. Don’t use too many words, use the right ones that stick with the listeners. Instead of shamelessly promoting yourself through superlatives you need to compare yourself to your competitors through indisputable facts. Data is (perceived as) objective and can be a powerful instrument.
Don’t say “we have a very impressive user acquisition cost”. Instead, skip the self-promotion, focus on the exact cost and compare it to the industry average.
Thеsе typeс of insights and the actual accomplishments say a lot more!
It’s all about numbers
This is where KPIs come into play - present your traction and market opportunity. The numbers should speak for themselves. As we’ve mentioned in our previous article the metrics that should interest you and VCs the most are CAC (Cost of Acquisition), LTV (Lifetime Value), NPS (Net Promoter Score), Churn rate, Burn rate, OCF (Operating Cash Flow), MRR (Monthly Recurring Revenue), ARPU (Average Revenue Per User), Net Profit, Gross Margins, etc. If you are capable of demonstrating that any of them are above industry average, then you’d have the attention of both angels and funds. And just like with talking, make sure you don't overcomplicate matters. If a chart is too elaborate to understand within a few seconds, then this could have a negative impact on the overall impression you leave.
Let them come to you
By the time you’ve finished, investors will know whether or not they’re interested. Don’t go to them afterwards, asking for their business cards or feedback - it smells of desperation and they’d rarely give to you anyway. Think of it as dating - the most desired person in the club is the one being approached by the others, not the other way around. Let them chase you, otherwise, you decrease your value. This will also give you more leverage when you sit at the negotiation table at a later stage.
Needless to say, there are a lot more tricks and ‘hacks’ you can put to use to appeal to investors. We can help you not only perfect your pitching skills but present your project to relevant investors (if we like it enough). Drop us a line and let us know what you need.