“We’d like you to pitch to us tomorrow.”
That sentence is both the best thing and the most nerve wrecking thing you’ll ever hear.
What it means is your elevator pitch has been a success and you’ll now get to put your winning pitch deck to good use by presenting it to the investors.
It’s time to put all that effort of turning your startup idea into a business.
It’s time to pitch your idea to investors and make them hand you the money.
But then you remember the facts.
Out of the 100 business plans VCs see, they accept around one or two. Indeed, 99.95% of startups won’t get VC backing.
One study found entrepreneurs need to attend an average 40 investor meetings before they succeed.
And since investors only spent just under 4-minutes looking at the pitch deck, the secret ingredient to pitching is often the live presentation.
So, how then are you going to make the investor listen to you?
More importantly, what can you do to make the investor invest at the end of your pitch?
We’ve already built a winning pitch deck but it’s now time to examine how you can make your actual presentation stand out.
In this part of the pitching guide, I’ll focus on:
- Helping you embrace the live pitch, as scary as it seems.
- Providing you with tips that ensure you pitch is prepared for everything.
- Giving you those all-important nine hacks that make pitching a breeze.
- Ensuring you don’t miss investments by forgetting to connect with the investor even after your pitch is done.
So, here we go…
Tomorrow I’ve got my first startup pitch to a super-important investor. I’m scared, excited, nervous, sick to my stomach and happier than ever – all at once! Help!
When an investor tells you they want to meet and listen to your startup pitch, you’ll go through all the emotions in the world.
It’s going to make you sick to your stomach, especially if you are doing it for the first time…and it doesn’t get much easier even after that.
Indeed, you’ll experience a roller coaster ride of emotions when a VC tells you, “Sure, come pitch us!”
First, you’ll feel hopeful – your dreams are quite a bit closer to coming true. Heck, your chances of investment JUST WENT UP and you haven’t even given the pitch.
Then just as you start thinking about the bigger offices you can have, the next wave of emotions hit you: you’re stressed.
You have to get the pitch right; it has to be perfect for it to work. You’ll start thinking about how to impress the investor and answer all the questions they’ll undoubtedly have.
And then comes the final part of your roller coaster ride: you start feeling scared.
You’ll go through all the scenarios – the one where you can’t speak, the investors laugh at you, and even the one where you are naked.
You convince yourself the investor will say “no”.
Now, the only way to out of this emotional mess is to just embrace it.
Yeah, it’s scary but it’s never over until the fat lady sings, right?
So, how can you deal with the emotions to ensure you don’t ruin your pitch before it even takes place?
You approach the investor pitch as an opportunity.
The investor wants to meet you, remember?
I’ve just told you how many startups they reject – most of these the investors don’t ever even meet.
You have landed a meeting – the investor is already just tiny bit more interested in you than a lot of other firms.
Now, when I say the pitch is an opportunity I mean it’s not just an opportunity for investment, it’s also an opportunity to learn.
Even if you don’t get the investor to invest, you gained valuable pitching experience – the next time will be easier, trust me.
Your VC will probably even provide tips and pointers that can help you perfect the pitch, your business model or the startup in general.
Finally, you also get to network with powerful people.
Investors are pack animals.
You meet one and you’ve undoubtedly met quite a few more than that.
Sometimes the investor you pitch to might not make the investment but they might just know someone who does. Heck, they might come to regret the decision when you are on Serious C round and they want to jump on board then.
Embrace the emotions and above all, embrace the opportunity to pitch.
And then remember…
Your success will be determined before you even step into the Shark Tank
Preparation is what wins you investments.
If you don’t know what you are talking about, you won’t make an effective pitch.
In short: if you don’t know your startup inside out then you might as well just walk away now.
Luckily, you do.
You’ve crafted a great elevator pitch, which you can use as a starting point for your longer pitch.
You’ve also created a winning pitch deck, which will guide you during your pitch and help you stay on topic.
You know your startup figures and you know what your vision is.
This part of preparation is done and dusted.
But what else do you need to be prepared for?
Learn about your audience
The most important thing is to know whom you are going to pitch to.
I’ve already shown you how you should always create the pitch deck and elevator pitch with the audience in mind. It matters because investors are not alike.
You want your pitch to emotionally resonate with the investors.
Now, as hard as it might seem to think this way but investors are human too!
They will have different desires, interests and fears. If you can address these, you can create a much more meaningful pitch that talks directly to the person.
One useful tool for becoming better at talking to different types of audiences is through the Six Thinking Hats theory.
The theory was developed by Eduardo De Bono and it essentially recognises that there are six different ways the brain can think about things.
You should think about your pitch by ‘wearing’ each of these hats.
What would the questions be for those with the Red Hat? What are the points about the pitch deck that would most appeal to Black Hats?
Then you just need to find out which thinking hat the investor(s) typically wears.
Yes, that’s right. It’s time to put Google to good use.
What you want to find out is:
- What type of investor are you dealing with?
- What are their strengths and weaknesses as an investor?
- What is their experience? Especially when it comes to your industry?
- What kind of past investment record do they have? What do the startups they’ve invested in reveal?
- What kind of person is the investor? What does he or she do outside of business?
Remember, this is all a bit like going on a first date with someone – you are trying to woo the investor.
A good way to do it is to know something about them. Something that helps create a personal connection to the investor – make them feel emotionally engaged with the startup.
Find out the investor profile on the VC’s website, check out their social media and LinkedIn. You should even see if you have common acquaintances, who can reveal you something.
The key is to research and modify your pitch accordingly.
Be prepared to answer tough questions
Investors will make you work hard for the money.
Even the likes of Facebook and Airbnb have had to endure some tough examination before the investors gave them money.
If you don’t get tough questions to answer, you probably didn’t do very well with your pitch.
What you should do is prepare for the questions in advance.
You should put on those thinking hats again and think what kind of questions the investor might ask.
Go through pitch slide by slide and think what would concern someone who’s about to provide you +$200k?
Which points would they hang on to and how can you answer to these issues?
Aside from looking at the pitch critically yourself, it’s a great idea to have someone else ask questions based on your actual pitch (especially if they have an investment background!).
You can also cut a few corners and be prepared for some of the most common questions, irrespective of your specific pitch.
Forbes has published a great post titled “65 Questions Venture Capitalists Will Ask Startups”.
While the post is worth reading, many of these questions are something your pitch deck is supposed to cover. You definitely want to go over the pitch deck with these questions in mind.
However, there are certain questions VCs are likely to ask even after you’ve given them an informative pitch. These are:
- How do you know what are the trends in your market?
- How much money do you need and why can’t you scale with less?
- What will your product do to the market?
- What has been your biggest failure so far?
- What if we don’t think you’re the right person to run the company in the long-term?
- Give me an example of your customer using the product.
Yep, they sound tough.
But if you prepare for these, you are prepared for anything.
Learn to stay calm
OK, so, some questions right there probably left your heart racing.
The pitch itself can throw all sorts of curve balls to your way.
The investor might interrupt you right in the middle and tell you to stop.
Anything can happen during an investment pitch.
The key is to stay calm when the shit hits the fan…or if you’re offered $2m outright. Yeah, jumping in joy is not a very professional look – you have to stay cool as a cucumber.
The reason staying calm is important is because it helps you stay professional and give concise and coherent answers.
Being stressed will actually change the way you make decisions. Research has shown people who are under pressure pay more attention to positive feedback than negative.
Now, this can have positive consequences but it can also mean you are overly focused on the good things the investor is saying instead of addressing the real problems.
Furthermore, when you are stressed, you are less likely to control your urges. You might, therefore, blur out an answer that first comes to your head because you want to solve the situation.
Overall, you don’t want impulses and fear to control you during your pitch.
Mindfulness and meditation are powerful ways to control your anxiety and stress. It might be worth doing a quick meditation before your pitch to clear your mind.
Above all, try to control your breathing as you are speaking. Knowing how to breath can help you stay calm and to pace your pitch just right.
Practice your pitch but don’t learn it by heart
You need structure and a good storyline to pull of a great pitch.
Practising your storyline will help you focus on the most important points in your pitch and to stay on time.
Timing is important – you ideally don’t want to talk more than 15 minutes. This should allow you enough time to go over the main points and it leaves plenty of room for the investor to ask questions.
Remember, if the investor has told you how long the pitch should take, you should aim to be at least five minutes short of it! This is to leave room for questions and discussions.
Now, practising your pitch is important in order to feel confident and familiar with what you are going to say.
However, it shouldn’t mean you give your pitch like you’re reading a script. Don’t memorise the entire pitch, but rather focus on knowing the main points and certain ways to keep the conversation flowing.
Be prepared for the pitch to change – the investor might ask something in the middle of the pitch and you don’t want this to throw you off.
Show your pitch someone
I suggested earlier you should show your pitch to someone in order for them to ask questions.
This is also helpful in terms of getting feedback on the actual presentation as well.
Giving the pitch to an audience can calm those nerves and help you test the timing, the punch lines and the structure more. You’ll get plenty more confidence to give it in front of the actual investors.
Who makes a good pitch audience? You can test it on your:
- Friends and family
- The other members of your startup team (who might not be at the meeting)
- An investor from another field or a retired/ex-investor
- Startup fundraising consultant
Check the need for technology
Finally, in terms of preparation spend just a bit of time thinking about the technology. This shouldn’t make or break your investment pitch but it’ll help you stay calm if you can ensure the technology works.
Make sure to check what sort of equipment the investment office has in place. This helps you see if you can give a proper PowerPoint presentation or do you just need to rely on handouts.
Generally, you need these items to give a solid presentation:
- A laptop
- A projector and cables to hook up the projector to the laptop
- Laser pointer or a hand help pointer
- Flip chart and markers (optional)
9 presentation hacks to guarantee startup fundraising success (even if you’re pitching the first time to venture capital investors)
You are now prepared and ready to pitch to the investor.
What are the hacks that guarantee the investor listens and more importantly, wants to invest at the end of the pitch?
#1 Start with a bang
You don’t have a lot of time when you meet an investor to hook them on your side.
According to the latest research, you start forming an opinion on the person as soon as they start talking. You don’t really get second chances when it comes to winning an investor over.
In the first 90-seconds, you need to have the investor thinking your pitch is worth listening.
You want to start strong – it’s much better than finishing strong since the investor would probably have made his or her mind by the time you utter your final words.
If you can hook them from the stat and present your startup as an interesting opportunity, they will stay with it for longer.
You can give your investment pitch that much-needed ‘bang!’ with three different starting points:
Of course, the key is to ensure the hook logically lets you start talking about your startup.
For example, that the cancer experience led you to develop an app for screening the illness or that you don’t need to rely on bricks for wine, when you have your new wine dispensary, and so on.
#2 Keep your pitch short and focused on presenting an attractive investment case
I’ve mentioned how important it is to make your pitch short and sweet.
The investor will spend around 4-minutes looking at your pitch and they won’t want to listen to a pitch that takes much more than 10 to 20 minutes.
If you can’t make the investment case in 10-minutes, then your startup probably isn’t investment ready yet and you need to work on that more than your pitch.
This doesn’t mean that you need to be in and out of the room in 10-minutes.
Indeed, your pitch might well take longer because the investors are so eager to ask questions. This is a good sign and as long as the investor is asking questions, you need to answer them.
Investors ask questions when they are interested and when they want to learn more whether your startup is a good investment.
Now, when it comes to sticking to timing and making sure you don’t talk too long, remember these tips:
- Start as soon as the investors are seated. Start with a bang and get to the point – the time for small talk is after the pitch.
- Don’t spend more than 3 minutes on a single slide. If you need more time to explain what you’re talking about, you might have to divide the slides into two or work more on the information you want to convey. Remember you’re not supposed to read the information as it’s written on the slides – investors can read. Explain, don’t repeat.
- Have a timer running in front of you to ensure you stick to the schedule. This can be on your laptop or smartphone in front of you.
#3 Treat your audience as smart people
You need to know your audience before you pitch.
This will help you make the investor pitch more relevant to the investors in question and therefore, make it more engaging.
But knowing your audience also matters for another reason: it helps you speak the correct language.
Investors are smart people. They do know about metrics and if they invest in your startup’s industry, they probably know a thing or two about it as well.
You don’t want to treat them like they are stupid. Dumping down content is not a good idea – you don’t want to come across patronising.
However, this doesn’t mean you should use industry jargon.
Investors are smart but they might not know the ins and outs of coding. Don’t assume they know something but don’t make it sound like they are stupid for not knowing it.
Keep it short, simple and informative.
If you’re talking about a product and its usability, a short introduction to how it would work in real life can help.
Don’t be afraid to use acronyms for metrics on the slides – when you pitch, you can give the full account.
More importantly, always allow the investor to ask questions and never make them feel like the question was stupid or self-explanatory (even if it was).
#4 Dress for success and increase your credibility
Pitching in front of investors is not a catwalk.
The investor doesn’t really give a damn whether you are wearing an Armani or something from Target, as long as you look professional and neat.
First impression matter.
Indeed, studies show that meeting someone for the first time activates the same reasons in your brain that you use for assigning a price to an object.
The investor looking and listening to you is literally assigning a value to you.
Investors will make judgements on how you look.
Your clothes give you credibility; the more credible you look, the more the investor can trust you.
And the more they trust you, the more willing they are to invest in your startup.
It’s easy for them to hang on things like appearance because…well, they are putting millions on the line.
If you were about to give millions with an uncertain result, you would try to pick up on little nuggets of credibility and trust.
How do you dress for success?
- Invest in a quality suit that’s well tailored and fits your exact measurements.
- Use neutral colours such as navy, dark grey, black or dark brown for suites and white, ivory, soft blue and champagne for shirts.
- Make sure you are trimmed and groomed. Get a haircut, shave and have a shower before your pitch.
The key is to feel comfortable and confident. Therefore, don’t wear a suit that feels too tight, use colours you hate or pull any other such tricks just because you think they are ‘cool’.
The more confident and comfortable you feel in your clothing, the better your pitch will go!
#5 Play with the emotions (and make sure you ENJOY the startup fundraising process)
Here’s a news flash!
Investors are real people, not heartless robots.
They feel emotions like the rest of us and it’s important your presentation targets these emotions.
Indeed, research shows decisions we think are logical (such as investing in a startup) are arguably always made based on emotions (what we feel about the investment).
Therefore, you shouldn’t just use pure reason and present numbers that back your case. Essentially, the investor will use emotions to make the decision and you need to keep this in mind.
How can you play with emotions? You can:
- Relate the story directly to the investor. If you know something personal about them, use the information. Perhaps they like golf, perhaps they are big donators to charity and so on. Make the product and the problem feel relevant to them and they’ll be interested in the solution.
- Make a joke relating to the problem or the solution. Warm, light-hearted jokes will relax tension and make people relate to you, especially if you’re laughing at yourself.
- Show honesty and passion. Talk about your own experiences with the problem or the journey you’ve been on getting to this point – the vision and origin stories can work here very well.
#6 Maintain eye contact in order to engage with investors
It’s hard to trust anyone who doesn’t look comfortable watching you in the eye.
If you can’t meet investor gaze, they probably won’t be handing out that cheque.
Again, it comes down to trust.
Research has shown that when a person doesn’t react to your gaze (i.e. avoids it), we assume the person is:
- Less sincere
- Less conscientious
- Less sophisticated
- Less able to self-control
- Less moral
When a person is able to hold eye contact, we have a tendency to believe what they are saying – if someone looks you in the eye when they make a statement, you believe it more than if they looked elsewhere.
Eye contact also engages the investor to listen.
If they realise you’re not paying attention to them, they might start playing Candy Crush instead. Since you don’t look at them, why should they look at you?
Now, too much staring is also…well, too much.
The key to good eye contact during an investment pitch is to:
- Maintain eye contact with the investor 80% of the time. The rest, you can glance your notes or look and point to the slides you are talking about.
- Focus on all the investors in the room (if more than one). Divide your time and don’t make it seem like you are only staring one of them.
- Turn towards the person who is asking questions or making a comment. However, when you answer a question present it to the whole room, i.e. glance at the others as well while you’re giving your answer.
#7 Talk like a professional and build trust with investors
You should also focus on your tone and the kind of language you use.
You don’t want the investor to know like you’re giving your first pitch ever.
The more confident you seem, the more the investor will trust you.
How do you feel confidence when you’re scared as hell?
The earlier preparation will help tremendously. Practice your pitch and know your startup inside out – be passionate about the cause.
You’ll also gain confidence by sounding like a professional.
The keys to sounding like a seasoned professional and making the investors believe you’ve done this a thousand times before:
- Avoid buzzwords that don’t mean anything but which most people think sound cool:
- Innovative, ground-breaking,
- Don’t say you are Google-like, Facebook-like, etc. Investors want a new startup to take over the world, not a copycat.
- Don’t fill empty spaces with “Uhh”, “You know”, “Like” and so on.
- Don’t lie. Investors will check up everything you say and they will find out if you’re bullshitting them. They won’t invest and more importantly, they will tell other investors about your dishonesty.
- Never apologise for things that aren’t your fault. If the technology breaks or the investor gets an emergency call – it’s not your fault. Don’t be a victim but take control. For example, if you don’t know an answer to a question never say you are sorry. Say, “I’m not able to answer your question now but I will give you the answer after.” Be solution-oriented, not problem-oriented.
- Be conversational not lecturing. Don’t sound like you are preaching to the investor about the product – let them in on this great journey, ask questions, involve them in the discussion and you’ll make it more enjoyable for everyone.
Build trust by remaining professional throughout the pitch.
I’ve said it before but VCs often invest in people more than the ideas.
Ted Leonsis once wrote that an investor told him:
“I don’t know anything about the market or the product that you are creating, but I believe in you, and I think you could sell snow to Eskimos.”
#8 Learn to buy time when you’re stuck
As I’ve said, anything can happen during an investment pitch.
The key is to master these situations in style.
Now, preparation and staying calm helps, but you’ll undoubtedly be thrown a curve ball you can’t immediately solve.
You might be facing a question you just can’t seem to find the answer to. Perhaps you’ve realised you really want to mention something but you can’t remember it.
Don’t be flustered by these occasions – just learn to buy time.
During the pitch, you can gain precious moments by:
- Have an anecdote or a story ready that relates to your pitch and use it if you are stuck at any point during the discussion. It could be something to do with a customer testing your product, the way you discovered the team or a story about what the project means to you.
- Reiterate what you just said to get back to the flow. For example, if you just talked about traction, simply reiterate the figures – it gives you time to think and it creates a moment of “Can you believe how we managed to pull this much growth in a month!”
- Move on to your next point. Don’t spend an eternity trying to remember a point, as it can make you frustrated and more stressed. Just move on to the next point and return to what you wanted to say as you remember it.
- Be honest if you don’t know the answer to a question. If the investor throws you a question you can’t answer, do not lie but be honest.There are generally two scenarios at play here. First, you don’t know the answer but you know, you have the answer with you in your notes. Simply state, “That’s a great question, but I can’t remember the answer on the top of my head. Can you give me a second and I’ll find it, as I have it right here.”The other option is that you have no idea what the answer is, in which case you can say, “I haven’t researched that from that perspective but I definitely will and get back to you on that. Thanks for the suggestion.”
Remember a few seconds of silence is not going to kill your pitch. After a question or if you get lost, just take a deep breath and regroup your thoughts.
#9 Read and listen to your investors to adjust your pitch on the fly
As I’ve mentioned, investors are different.
While one VC might let you talk and then ask questions, another might just jump in at anytime and interrogate your plans.
Allow the investors to be part of the pitch and to ask questions when they feel like it.
Because it makes the whole situation more like a discussion rather than a lecture.
You show professionalism and the ability to think on your feet if your pitch doesn’t fall apart just because you were interrupted. It can also guarantee you don’t blabber on about things the investors don’t care about.
It’s not just what they say but also how they look.
Their body language might tell you that they are really into your figures. So, you can throw in another figure that will hook them further.
But how do you read and listen to investors and pick up on these clues?
Learn to read subtle body language cues and keep your eye on these when you are pitching. Entrepreneur listed some of the most important cues you should keep in mind:
Furthermore, remember that:
- If they mirror your body language, they are being receptive
- If they can’t hold eye contact with you when they speak, they are not interested or they might be lying
- If they are truly smiling, they’ll have crinkles around the eyes
Above all, if the investor is slightly turning away from you, they are probably not engaged with your investment pitch.
If this happens, try switching the topic or involving the investor in the conversation. Ask a question or make a humorous comment – something to shake up the situation.
The more engaged you could keep the investor in your pitch, the more likely they are to buy into the story.
Nurturing relations with potential investors: don’t treat your pitch like the final chance to connect with the investor
Once you’ve given your pitch, focusing on the nine tricks and hacks I’ve just given you, the investor is likely to exchange pleasantries with you.
“Sure, great, we’ll call you.”
Now, they might…not.
OK, so here’s the thing.
Don’t assume a positive reaction (even more upbeat than what I just outlined there) automatically means the VC will call tomorrow and make an investment.
Heck, the DocSend study found it took 12 weeks to close a deal.
Now, the investor might not ever call or they might call to say they just didn’t love you.
Never lay your eggs on a single investor basket.
Remember, it takes 40 investor meetings to get an investment. Therefore, even after a single pitch opportunity, you need to be thinking about the next one.
However, there are a few things to still remember with the ones you’ve pitched to:
- Send a follow-up e-mail to the investor: thank for the opportunity, clear any issues that were left unsolved, and remind them of the ways to stay in touch.
- Keep the investor in touch with any developments: initiatives that are happening, the schedule for the investment round, metric changes, key hires you’ve made or any big new customers you’ve received.
Overall, create a sense of urgency by mentioning deadlines, hinting that your discussing big investments with others, mention you could get a big hire or contract if you get the right investment now.
If the investor feels competition or urgency, they are likely to act sooner.
Now, if the investor were to say no, you have to accept it and move on.
Learn from what might have gone wrong (was it the pitch? Is it the startup?) and improve your pitch and business based on those.
Remember to keep the investors updated. If you show them progress and growth, nurturing good relationship (even when they didn’t invest), you might get them on board later.
See, it is possible to turn those ice-cold investors to raving fans pouring millions to your startup!
So, what do you think: what is the hardest part of pitching?
Do you think it’s just a matter of practice?
If so, you might like the next part of the guide, when I’ll reveal some great pitching exercises.