Seeking investment is a matter of survival for a bootstrapped startup, while an established one needs it to join the unicorn club. But raising funds is not easy, and majority of startup entrepreneurs fail in the process.
The most common problem with new startups is they fail to explain their month-long research in a few minutes, and most don’t understand the right ways to put their ideas of scalability to prospective investors. It’s been widely believes that if a startup entrepreneur fails to attracts investors to his business idea within the first 30 seconds, he is tend to loose the deal.
So, how do you explain everything you know in 30 seconds?
Richard Branson, a British billionaire, says, it’s simple, you don’t explain everything you know. He adds, “If your pitch doesn’t fit on a napkin or the back of an envelope, tell it to someone else who wants to hear it.”
But Branson advocates that investors don’t want to hear everything about your startup. Instead, they want you to complete the pitch in 7 to 10 minutes, including base points that matter a lot.
Branson advises that the pitch deck or presentation must be answering four the most important questions.
- What’s the idea?
- What problem does it solve?
- How is it different from anything on the market?
- Why should he accompany you on the journey?
Precisely answering the in-depth knowledge of any topic is difficult, but repeating research makes your pitch uninteresting, actually boring!
When you pitch a billionaire, you must value their time and only explain things that matter the most to your business. Use PowerPoint slides, data visualising tools, and videos, but make them concise and to the point.
If your start-up gets selected, you can later send the follow-up documents for them to read and explore other dimensions of your plan. But initially, keep your pitch focused, tight, and concise.
The next extremely important thing is what you include in that 10-minute pitch!
Carmine Gallo, senior contributor, Forbes, beautifully explains, “An inspiring pitch has three components. It must be emotional, novel, and memorable.”
He emphasises that an emotional pitch is far better remembered than a statistical one. You need to make sure that your pitch reaches your audience’s heart with a convincing thought that this product has the potential to solve the problem.
Stories can do wonders, “The problem is the villain, and your idea or product is the hero.” If you can clearly explain your buyer’s life-changing story, you can surely add those much-needed points for selection.
Remember the Maggie ad? How they target your emotions by showing their buyer’s relation with Maggie in college days or the connection between Mom and kid. They sell emotions, not noodles. Continues to dominate the market!
Would you rather be attracted to the same old dating ads that claim their platform is the best and safe, or would you be interested in this unique Satan and 2020 ad by Match.com? It’s a simple example of uniquely explaining the same old dating concept.
Your idea doesn’t have to be unique, but how you implement and explain it to others has to be unique. Dr A.K. Pradeep says, “Our brains are trained to look for something brilliant and new, something that stands out, something that looks delicious.”
Something new always looks interesting. It immediately attracts.
It would help if you made people remember what you said, the takeaway! Investors hear many pitches, ideas, and investment plans every day! That’s why they can forget even the best ideas you pitched. All efforts are useless if no one remembers what you said.
Gallo says the best way is to figure out, “What is the one thing I want my audience to know?” Like tweets, famous dialogues from movies, and memes. Anything easy to consume that delivers a message or humour is easy to remember.
Give your audience something that sticks in their head. That will make them remember your project.
Hear from a new start-up founder
Leo Guinan shared his story on Medium titled “From Clueless to Pitching a Billionaire in 7 Weeks.” His start-up was four months old, and he made $20 for two months; he launched the Substack newsletter with a single paid subscriber. Still, he got a chance to pitch to a billionaire investor.
Guinan says, “You figure out what value you can provide by providing value to others. Then you package that up and sell it.”
He emphasises being confident about your idea and says it’s about mindset. You don’t need proof. Just the project and pitch need to make sense.
The bottom line
So how do you make a worthy start-up plan that stands out and increases your chances of raising investment? Repeat after me
- I will make my pitch focused, tight, and concise.
- My pitch will include the emotional, novel, and unique elements.
- I will not be afraid to reach out to investors to pitch ideas, no matter where my business stands in numbers.
Okay, can you do that?
Creating a great pitch is important, but what is more crucial is delivering it within 7 to 10 minutes. Value the investor’s time, and they will value your ideas. Keep it simple but interesting.