We admit it: Pitches are nerve-wracking. You’ve got five minutes to wow investors. Or two. Or maybe even 30 seconds if you happen to find yourself riding in a fast-moving elevator with Daymond John (hey, it could happen). That’s a lot of information to pack into a short amount of time. Here, experts tell us what to cover in those few precious moments and how to leave investors hungry for more.
Start with the basics.
At a minimum, your pitch must cover the problem you’re solving, why your product or service is different from everything else on the market, your competitive advantage, and your team’s expertise. “What’s the secret sauce?” said Debjeet Gupta, a venture capitalist, startup mentor/advisor, and investment banking associate at Solganick & Co. “I want to know why [entrepreneurs] believe that customers would come to them and not to their competitors. In other words, what makes them sticky? How are they different? How will they compete with other bigger players in the market?”
Make sure your team is made up of people with diverse and complimentary skills, and make sure to use some of the time you’ve been given talk them up. “One of the most important things for me is to understand is the team dynamics,” said Gupta. “Why did they think of this business idea? Are they passionate enough to follow through the ups and downs and challenges of running a startup? How well they go along with each other?”
Be prepared for tough questions.
Investors want to get a clear picture of the opportunity you present, so be prepared for questions that probe deeper into your business. “Have these numbers on the tip of your tongue: gross/profit margins, revenue, cost of goods sold, customer acquisition costs, funding needs, and return on investment,” said Ande Lyons, a serial entrepreneur and mentor at Startup Life with Ande Lyons, who also advises entrepreneurs to prepare slides that answer these questions.
You’ll most likely be asked about current users as well. “Show some customer validation,” said Gupta. “Prove that you have already done a feasibility analysis by talking to customers, conducting surveys, and [doing] trial runs.”
When you’ve got a great idea and you’re starting to gain traction, it’s easy to fantasize that you’ll be the next Google or Uber, but be careful not to overstate your case. “Your total addressable market should be big enough to entice investors, but don’t exaggerate your assumptions or the market,” said Gupta, who adds that your growth trajectory should be believable as well.
And never say you have no competition. “There is always a competition,” said Gupta. “If there isn’t competition, the idea isn’t feasible.”
Anticipate what your audience wants to hear.
Think about how life will improve for investors who bet on your team. Then, make sure to drive those points home. “Follow the concept of, ‘What’s in it for me?’,” said Gupta. “Investors should start believing [during your pitch] that they will have exit opportunities through an M&A or IPO.”
“Investors want to see if they really might like working with you, and they probably won’t form that impression if you aren’t receptive to their ideas,” said Lyons. “Be prepared to engage and debate, not defend. Acknowledge good points made by investors/expert panelists, but keep leading them back to the core reasons why your business can scale and succeed.”
While pitching, it’s important to get your points across succinctly. Be careful not to go off on a tangent—you only have a few minutes, after all, and don’t want to get cut off before you’ve gotten your key concepts across. “Anecdotal stories often confuse listeners or are just too long,” said Jonathan Broder, founder and CEO of Privsee.
“Investors and panelists love getting into the weeds, and that’s okay, because their feedback makes you a better founder,” said Lyons. “Welcome their insights and perspective, and genuinely thank them for sharing.”
“Believe in your idea and believe in yourself. Don’t expect others to believe in you,” said Gupta. “The majority [of people] will say you won’t succeed. It is how you train your mind toward positivity that determines your result. No one became an overnight success.”
Be prepared for your pitch. “Practice. Practice. Practice. Don’t wing it,” said Broder.
Think you’ve got what it takes to wow our judges? We’d love to hear all about it. Apply to VentureClash today.