So you’ve decided to go after an investment from that angel or VC firm and you’re about to give your first pitch. This is your big chance to get the cash you need to power ahead towards your goal, so make sure you’re well prepped and can nail it.
Having witnessed a number of entrepreneurs pitch to VCs and angels and then having been involved in the decision about whether or not to fund, I can tell you there are some basics you need to nail if you want to get funded, no matter what your business is.
FIrst up, get to the point. If you’ve been talking for 5 minutes and I still don’t know what the heck your business does and how you make money, that’s a problem. Investors see pitch after pitch after pitch so they’re not interested in the fluff. We want to know what you do, how you do it, and why you’re so much better than everyone else that the customers will flock to you instead of your competition.
And while we’re on that topic – do not say you have no competition. There is no such thing as a company with no competition unless your idea is horrendous. If you say you have no competition it means you either haven’t done your research, don’t understand the competitive landscape, are straight up lying, or you’re trying to sell something that nobody wants.
Even if you have a brand new product you still have competition – whoever invented the microwave had to compete with conventional and toaster ovens, The first cell phones competed with pagers and house phones. You still have competition even if your product is incredibly unique, so make sure you know who you are and how you will convince customers that you’re a better choice.
You also need to know the workings of your business and your business plan inside and out. Be prepared to answer tough questions and make sure you can justify any of the numbers that you put in your pro formas. If an investor asks you how you intend to get those 1,000 customers that you predicted in the first month, you’d better have an explanation for it and its accompanying expense in your financials.
Plus, be prepared to justify why your team is the team to do it. Experienced investors know that great ideas are a dime a dozen, it’s the execution that will make or break you – so they want to know why you and your team are in charge and what you bring to the table. Dead weight is a red flag, so don’t stack your c-suite with people that don’t deserve to be there. Finally, try to remember to be likable. You don’t need to get a standing ovation, but these investors are going to be tied to you if they invest and if they can’t stand to be in the same room with you, they’re more than likely going to pass. Don’t do a stand-up routine, but remember to be yourself, don’t get defensive if they give criticism or ask tough questions, and make them see that you’re a person who is smart, reliable, open to guidance, and one of the hardest workers on the planet.