4 Simple Pitch Tips that Will Attract Investors to Your Startup
Finding the right people to invest in your startup is kind of like trying to get a date with a great looking person at a bar. You've probably got a lot of competition, and your rivals might have "better" things to offer. They might have a clearer business plan or more experience. What they want to do could simply align better with certain investors. In truth, your competition isn't that big a deal. Just concentrate on yourself. The trick is matching your startup with the right investor for you and your company. Avoid going after "popular kids" just because you're looking to collect a trophy or status symbol.
Many founders who search for investors are looking for someone who can do more than invest. They want someone who can advise and maybe even do some work for the team each month. For example, if you're building a social media-related startup, you might generally be looking for folks who have invested in or worked with marketing companies.
The first thing you need to do is your research and get to know the investors as you narrow them down. It's relatively easy to find out where a person has invested before, as well as their personal interests. You can also quickly discover their educational and professional background through sources like AngelList, which can be matchmaking gold for you. Here are some of the quickest ways to get noticed and start a relationship off right.
1. Combine simplicity with disruption
The best ideas are often the simplest, so make sure both your products and services as well as your pitch are short and sweet. Your product should of course be innovative as well. Developing such an offering is only half the battle. You also need to show it off correctly. Don't get too technical, don't depend on jargon, and state your pitch without being condescending. "Remember that if you're meeting with an investor with experience in your space, they should be able to understand your business proposition pretty well already," says startup CEO Scott Cohen. "You also don't want to give too much away about the company before they sign on."
2. Tell your story
Investors hear pitches, whether they like it or not, day in and day out. Storytelling, however, is a common thread found in most cultures on Earth and naturally makes people want to listen. I have found that stories actually make pitches easier for me to sit through, because I'm not attempting to figure out how the product works yet. I'm simply enjoying a story. If you want to pique the interest of investors, you can tell a story, but don't let it get too convoluted. A story can also help to make you likable, which is of course a must.
3. Mix in philanthropy
Many investors are entrepreneurs themselves, and the reality is that entrepreneurs are more prone to charity than any other demographic. Plus, people are simply more interested in companies that serve a common good (even if they also sell, say, hairbrushes). "First of all it feels good to be charitable, but secondly, let's be honest. Being charitable makes you look good," says Cohen. Draft your business plan with a charitable angle from day one and make sure to highlight it during your pitch. This can also help you pinpoint investors who share your same charitable views.
4. Confidence through practice
Again, treat this like you are on a date, or trying to convince someone to go out with you. Don't be too aggressive or too aloof. Nobody wants someone who is too desperate or too uninterested. Strike a balance. If you don't appear to be interested in what an investor has to offer, why would they want to give you money? Finding this balance takes practice of course, so if possible, give your earlier pitches to less distinguished backers whose investment isn't crucial. Try to work your way up slowly to more esteemed, powerful investors so you have time to improve and make mistakes with your pitch.
Where do you find these investors anyway?
Oddly, it's easier than ever these days, and yet more difficult at the same time. Many angel investors will find you themselves. Some are actively looking and will reach out. You can't rely on those though. There's just too much noise out there.
You have to create an online brand and begin PR work even before your startup has officially launched. Check out crowdfunding sites because big investors sometimes hide on them. Rely on your network for possible referrals. Also, look for incubators and accelerators that have investor pitch competitions. Be prepared to do all of this legwork yourself. The same goes for perfecting your pitch. Practice will make perfect, or at least good enough to help you find the investors you are looking for.
JOHN BOITNOTT | Columnist
A journalist and digital consultant, John Boitnott has worked at TV, newspaper, radio, and internet companies in California for 20 years.