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post-title How to pitch to investors

How to pitch to investors

Last modified: July 3, 2019

How to pitch to investors

How to pitch to investors

Every new entrepreneur has one thing in common—the need for money. A popular way to gain capital for your startup is to recruit investors. Whether you are pitching your company to a friend, an associate, or a complete stranger, these eight simple tips will help ensure that investors will be interested in your business.

1. Be a story teller

Every company has a story. Your company’s story is comprised of all the reasons you decided to build it. This could be a problem you faced, and experience you had, or even something that inspired you to create your business. Regardless, portraying your business vision as a story provides an emotional attachment that demonstrates to investors how much you care about your startup.

2. Take only ten minutes

You can only pitch to investors for as long as you have their attention. Make sure to strategize your pitch by including the important and most interesting information first. If your investor gives you ten minutes to pitch, you should finish in nine minutes. This gives you the chance to answer questions or receive feedback before the investor loses interest. It also helps you to prioritize vital information and avoid rambling.

3. Be clear and honest about your product or service

Honesty is everything in the startup industry. If your standing face-to-face with valuable investors, it may be difficult to avoid glamorizing your business idea. Keep in mind that no matter how much you want your business to succeed, it either has potential or doesn’t. Being honest and clear with investors will benefit you in the long run. If you have a good startup, investors will react with interest. If you are not receiving good feedback, you may need to take your business back to the drawing board. Either way, being honest with investors is a good way to gauge the potential your product or service has.

4. Provide a picture of your customer

Using a short amount of time to discuss your intended client can help the investor visualize the product or service in action. Keep in mind that your business doesn’t exist yet, so you need to provide an ideal picture of who your customers may be once your business is a reality. This will help convince the investor that there is a market for your product or service.

5. Explain how they will make their money back

This is called the “exit.” The entire point of investing in a business is to make more money by the end. Eventually, investors need to make money rather than give money. This can be hard to picture from the entrepreneur’s point of view because you want long term investors. However, in order to receive an investment, you must provide a timeline of how the investor can make his or her money back. A good way to do this is by projecting how their investment would pay off in five years. Explain to them how five years from now, they will have their money back, but don’t forget to be clear and honest.

6. Anticipate questions

As previously discussed, your time is limited. Before you pitch, consider some questions that your investor might have. Being prepared to answer questions allows your investor to acquire the knowledge they need to decide about your business. Supplying comprehensive answers eliminates the “what if” from your investor’s thought process. Having to many “what ifs” can be perceived as a risk that your investor may not be willing to take.

7. Dress to impress

The way you dress may be the most important part of your pitch. Research has shown that it takes only seven seconds to develop a first impression. If seven seconds is all you get, dressing to impress is a great way to guarantee a good first impression. Additionally, dressing well is the perfect way to complement your pitch. Try to appear professional but dress for the occasion. Whether you are pitching over coffee or at a meeting, always dress ready to accurately portray your personal brand.

8. Practice

Giving a good pitch takes practice. Make sure to time yourself and even record yourself to perfect your pitch. Try practicing on your friends or colleagues to gain confidence. In the pitch, you want to convey how you feel about the startup so speak with passion, excitement, and professionalism. Be sure to take note of your hand and arm gestures as well. Using the appropriate gestures can convey confidence and captivate your investor but using the wrong gestures can make you seem nervous or distracted. Despite all the pressure, remember be yourself and your idea will shine on its own.  

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