One of the biggest challenges of any entrepreneur is the pitch, a.k.a. how they tell their story. Oftentimes, you're dealing with an engineer who talks engineer language, but what's really needed is a more human story that people can relate to.
Here is how to build the perfect elevator pitch.
Come prepared. Don't skip this step.
This is a crucial step that unfortunately most entrepreneurs miss. Oftentimes, the founder is so excited that the investor is considering deploying capital into their startup that they come to the meeting totally unprepared.
Some questions you must ask yourself before meeting an investor include what stage they are most comfortable investing in, what do founders who previously raised capital from this investor have to say, what is this investor most excited by (use social networks for this), and maybe even what this investor's personal status is--are they married? Any kids? Etc.
All of these questions and more will enable you to speak to that investor in their language, but it also gives the investor the impression that you are a serious entrepreneur who does her research. Nothing like a good first impression.
Spend a few minutes establishing some common ground.
I know it might sound funny, but nothing establishes common ground better than mutual friends. Like most meetings, business or personal, a few minutes of icebreaking conversation does the job.
That leads us to another important point. Never, ever approach an investor cold. Don't cold call them, don't even cold email them. Always try to find a warm intro, the ideal one being a founder of one of that investor's portfolio companies.
Nothing says to that investor that he should take you seriously better than an intro from a founder the investor respects. Always find an intro.
Start the pitch with the words "You know how ... ?"
I've told this point to countless entrepreneurs over the years. Do not start the investor meeting by saying, "We've developed an algorithm that does such and such." Don't even start by saying, "We are going to revolutionize our space."
Start with the problem and, using the research you did, make sure the problem is a pain point to that specific investor. So if they're single, don't start with the words "You know how your spouse does ... ?"
So, for example, if you're building a GPS tracking watch for kids, you might begin with "You know how you were afraid you were going to lose your daughter that time in the park? Our product aims to solve that so it should never happen again."
There's your elevator pitch with the single goal of that investor's saying those three famous words, "Tell me more."
An elevator pitch is meant to get the person's attention, not to answer every single question they might have. It's much like a tag line or a subject of an email. You read it and you want to know more.
Don't focus only on the problem. Remember to explain your solution, and vice versa.
I've worked recently with several entrepreneurs who spent 90 percent of their investor pitch addressing the problem. That's great, but 90 percent is too much. Maybe the split should be 50-50. Fifty percent explaining the problem and how widespread it is, and 50 percent on how you're going to solve it.
Once you get to the part where you are describing your solution, do not use words like revolutionize, disrupt, or change the game.
That is the investor's job, to decide whether your product is revolutionary. Your pitch and your deck should be much like a press release: fact-based, no superlatives, and just the dry objective data.
Do not, under any circumstances, come rehearsed or read off a paper.
This is probably the most off-putting thing you can do. Know your pitch--don't read it off a paper or tell it like a robot. It's very obvious that you're reading off a paper or that you rehearsed this pitch word for word for hours. Not good. You have to be prepared to speak the language of the investor, and to pause to let them ask questions.
Reciting the pitch like a robot will make a really bad impression and indicates to the investor that you are not flexible or confident enough to tell the story by heart.
Flexibility and confidence are two major characteristics that investors look for.
Those are five of many things you should think about when articulating your elevator pitch. It helps you crystallize your story, it makes a good impression on the investor, and it teaches you skills you are going to need along the journey of your startup.