Do you run a small start-up and hope to grow your operations with outside financing? If so, you likely already know that pitching your business to a venture capital (VC) firm is one way to land that funding. After meeting with a VC, your first step will be to put together a pitch deck – the slide presentation that describes your business and convinces investors why they should provide you with funding.
Your pitch, which might last ten minutes or an hour, is what the VC will use to decide whether or not it will invest in your business, so nailing that pitch is crucial. Here, we discuss five tips to help you deliver the most compelling pitch possible and land you the funding your start-up needs to grow.
1. Prepare an Effective Pitch Deck.
Your deck needs to be highly effective. Anyone can put together a presentation, but you only have a limited amount of time to convince a VC why it should invest their money in your start-up. As a high-level overview, all pitches should include:
- The problem your business aims to solve
- Your solution to that problem
- The details about your product or service
- Your target audience
- Your strategy
- Your financials
- Your exit plan
This might seem like a lot of information to include, but you should still be sure to limit the number of slides (some VCs suggest not going beyond ten slides, so try to keep it between ten and twenty, at most). Remember that your slides should serve only as a guide as you present. They should not include every word you plan to say. Do not overwhelm your investors with text and information – the focus should be on you and what you have to say about your business. That is what makes for the most effective deck.
2. Nail the Elevator Pitch.
When you begin your pitch, get straight to the point. Your first slide sets the stage for the presentation, and you need to convey immediately why your start-up exists and why the VC should want to hear more from you.
Start your presentation with an elevator pitch – a thirty-second overview of your target market, its problem, and the solution your start-up provides. VCs like it when start-ups cut right to the chase. They do not want to spend half the presentation trying to guess what your business is. Tell them right away with a concise elevator pitch and get them hooked from the beginning.
3. Highlight Your Team.
As the leader of your team, you will prepare and present the pitch to investors. Sometimes, other members of your team might accompany you on the pitch. But even if they are not there in person, be sure to highlight each of your key team members during your presentation. Your idea and business matter, but without the right people, your business will never succeed. That is why VCs are particularly interested in getting to know your key people.
Share the names and roles of your key people, but take it a step further and share a little bit more about them. Perhaps your marketing manager is a whiz at a specific type of internet marketing. Include this insight in your presentation and the VCs will get a better picture of the talent that your team brings to the table.
While it is important to share the team members you do have and their skillsets, it is also important to let VCs know what you do not know or have. If you lack the talent in a specific area, do not be afraid to share that during your presentation. VCs are quick to figure things out, so it is best not to hide anything. It is ok not to know everything or have the resources to hire every necessary employee yet – that is why you are seeking funding, after all, to grow your business.
4. Be Specific About Your Financing Needs.
Do not beat around the bush when it comes to how much funding you are seeking. Clearly spell out how much, if any, has already been invested and how much more money you need to grow your business.
When figuring out how much funding to request, first determine what you think you need to meet your goals. Then, ask for double that amount. For example, if you think you will need one million to take your business to the next level, ask for two million. That will serve to cover all the unexpected issues that are sure to arise and will prevent you from having to go back to the VC for a second round of funding. The worst thing that can happen is that the VCs say no or offer you less money, so it is worth the shot.
5. Practice and Prepare for Questions.
Finally, practice your pitch on friends, family members, and colleagues. Go through the whole presentation and ask them to provide you feedback and to ask questions. This will help you figure out if a certain part of your presentation is confusing or needs more detail.
While they will not ask all of the same questions a VC will ask, your friends and family will raise good points that investors will likely raise, too. Not only will practicing help you anticipate questions the VCs will ask, but it will boost your confidence, get some of your nerves under control, and prepare you for the real deal.