The Perfect Pitch: How To Effectively Pitch To Investors

How Do You Pitch to Investors?

Perfect Pitch: Jerome Gentolia: Venturestab

Guitar by victor.lavrentev via Flickr

They say that someone who has a perfect pitch is able to identify a note upon hearing. Blow your car’s horn for example and he can tell whether it is in C# or Eb. In the venture capital and angel investment context, however, the entrepreneur who has a perfect pitch is the one that gets funded.

There are basically two types of pitches:

1. The Elevator Pitch

It is a brief overview of your company and its product or service. It is called as such because the idea is that you should be able to deliver it in the time span of an elevator ride. This can last anywhere from 30 seconds to 2 minutes. Your words, therefore, must be carefully planned and your delivery must be well-rehearsed. Investors often use elevator pitches as a gauge to determine whether or not a company has a good idea and management team behind it.

So think of a 30-second commercial for your project. It is important to have one. Why only 30 seconds? Because sometimes that’s all you have. Let’s say you attend a conference and have the opportunity of talking to an investor. You can’t afford to do a lengthy pitch. Because while you are blabbering, his mind will be focused on only one thing. Getting out of the conversation.

Investors don’t attend conferences to listen to hour-long pitches from every entrepreneur they meet. Should you bump into one, you only have a few seconds to spark his interest before his attention is drawn to something else. This is where your elevator pitch comes in. A few but carefully thoughtout words could translate to a meeting with him in the future where you can do a full-length pitch.

2. The Full Pitch

If you are able to schedule an appointment with an investor, then you should be able to do a full-length pitch. But it doesn’t mean an hour-long presentation, 50 slides of Powerpoint, and a 74-page business plan. Halfway into your presentation, your audience surely would have mentally checked-out.

Your pitch therefore must have the following characteristics:

Brevity. Say as much as you can with the fewest possible words. This means that your presentation should only:

  • have 7 to 10 slides
  • last 10 to 20 minutes
  • use fonts bigger than 30 points.

This is referred to as the 10/20/30 Rule of Powerpoint by Guy Kawasaki which he discussed at length in his blog How to Change the World

Completeness. There are certain elements which investors look for in a presentation. Neglecting to include them would certainly be detrimental to your cause. Your presentation must contain the following:

  • Vision/mission
  • Problem/solution
  • Marketing and sales
  • Management team
  • Business model
  • Status
  • Competition
  • Financials/projections

Other pertinent information can be included in the appendix. You can even impress investors when they ask a question and you bring up a slide from the appendix to answer.

In The Torturous World of Powerpoint, Brad Feld enumerated all the questions which entrepreneurs need to answer in their presentation. You can make the world a better place—at least for him—if you follow his guidelines. Similarly, David Cowan lists the things you should include in your presentation in How To NOT Write A Business Plan.

The Perfect Pitch

The average investor will tell you that they sat through thousands of pitches. And most of them suck. They are either too long or they lack information.

So, what constitutes a perfect pitch? Brevity and completeness. It doesn’t matter if you’re in an elevator or in a conference room, as long as your pitch has both characteristics, then it is the perfect pitch.

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