I have been involved with hundreds of pitches as a Founder raising myself, an investor being pitched to, watching others pitch and listening to people practice. I have raised millions but I have also had a lot of outright rejections and a few people have even laughed at me.
First up, your chances of getting funded in any pitch are low. It’s a numbers game. You need to kiss a lot of frogs. You need a thick skin and never take it personally. It’s business after all.
Start by pitching to investors you don’t want. This way you will make mistakes, learn and improve your pitch in time for when you are talking to the people you do want. After only 5 to 10 pitches you will have refined it down and been asked 99% of any questions you will be asked in the future.
So what makes a successful pitch?
You may think it’s about getting funded. Well of course, that’s important but what you really want is the person you have pitched to, to be so excited they tell their friends about you. If you can achieve that, then people will end up asking you to pitch to them and not the other way around.
In order to achieve this there is no proven recipe but there are a few things that you could do to improve your chances of success.
Keep it simple — This is the most important advice. You may have a million stats and stories but make it really simple and explain what it is you do, how it’s working and your future plans. You will have plenty of time to answer questions on LTV, CAC, Contribution margins etc.. in future conversations if the investor shows an interest. Don’t pitch too much on the first date.
“How does this lemonade stand make money?” was some good advice I got from an experienced US investor. He said he needs the business to be clear and make sense. He said he always thought of a lemonade stand (it’s quite common in the US for kids to have a lemonade stand on their drive to make a few dollars pocket money), it has simple ingredients and gets sold for a price. It’s quite clear if it makes money or not. Even if your business doesn’t make money today, make sure you have a plan and can articulate it clearly. If you can’t you probably won’t get money.
Slides — These are to support your pitch and are not your pitch. You are the pitch. To that end, if you use slides then keep them simple, clear and include very few words. Zero words is a good starting point to aim for. You want the investor listening to you and not half reading your slides and half listening to you. Also, the slides you send to get the meeting or after the meeting are NOT the slides you use in the pitch. Don’t be lazy around this point.
Coffee Shop test — at a recent event at startupleadership.co.uk I heard a good idea. To ensure your business makes sense then write down a paragraph to describe it. Give this to a random person in a coffee shop and ask them to read it. Go and buy a coffee (offer the person one too) and then when you come back, get them to tell you about your business. If they can then bingo. If not then you need to think of a better way of explaining it or perhaps its time to try a new business!!
Never trust tech — assume that any product demos will fail due to some reason outside your control. Have a plan B and be prepared to pitch with no tech at all. That said a demo is always good if it works and if your business is something physical then have a few examples with you to show.
Understand your audience — if you are at a competition then find out who the judges are and what they like. What are the criteria? What have they invested in? Pester people. Slightly adjusting to suit the audience will dramatically increase your chances of success.
Video yourself — unless you are a narcissist then this is a horrible experience. Pitch and then watch yourself back. You will see yourself moving around, your hand waving, you continuously touching your ear, mumbling, speaking too fast etc… Do this a few times. If you only do it once it will help tremendously. I would recommend doing it three times.
Confidence — remember for early stage investments people look at you more than your idea. You need to be confident and clear. You know more about your business than anyone so you can be confident. Remember if you don’t answer it how you wished to then they will never know. Never apologise. I also heard someone give an introverted Founder this piece of advice:
“For goodness sake you have a great business but YOU are not investable. Go and take boxing class or something. Come back when you have done that and I’ll fund you”
Keep going — Raising money is hard. Studies show that 80% of a human’s thoughts are negative. People are always looking for a reason to say no. Don’t give up. Take all feedback and say thank you. You don’t have to actually act on it if you don’t agree.
Do you really need to raise? — Probably worth asking yourself again and again. Can you bootstrap it to show some traction or test a market? If you can you will have less issues raising and be able to keep more of your company. If you don’t show you have put in a bit of money eg £500 or £1,000 then its harder to convince someone else to.
If you need to raise then remember pitching and fundraising is hard but it is often an essential part of being a startup Founder. Practice makes perfect, although I don’t think its ever possible to get to perfect. If you want some help then take a look at founderspayforward.com for some free pitch events.
Good luck
