1. Five Minutes? Try 30 seconds.
A great entrepreneur can pitch their startup to anyone in 30 seconds or less. Don’t be intimidated by the 5 minutes. Use the remaining 270 seconds as a luxury to elaborate on what you just pitched. By focusing your efforts on creating a 30 second pitch, this will empower you to really choose what points are essential and which ones are unnecessary. Don’t try to squeeze in every cool thing about your company. Tell us why it is your dream. Let the passion of your dreams convey the reason why you believe so much in your idea. Who knows, others may start to share your vision and follow your dreams too.
2. V M V
Having a strong vision is essential to gaining the attention of investors. Making a statement of this vision is also necessary in building a great team and a great company. A Vision Statement is the big picture. The grand goal. Its purpose is to get everyone excited to jump on board, including investors. Example: To engineer and build the most stunning architectural achievement the city has ever seen.
Your vision should then be explained with a statement that most companies prepare: the Mission Statement. This is where the details come into play. The “how” you plan to accomplish your vision. Example: We plan to build the structure by creating a committee of 300 experts, each dedicated to a specific height in order to finish the construction within two years.
Knowing both statements can prepare you for many common investor questions. However, these tools rarely explain the manner in which you plan to succeed. A Values Statement is a vital but often ignored declaration of principles that gives your team standards to follow. Example: We will use only the highest quality iron and be mindful of weather conditions everyday before any worker goes up Eiffel’s tower.
3. Have A Conversation.
Repeating your VMV statement like a well rehearsed actor can get your idea across, but you could come off sounding like a recording. The most successful investor meetings are the ones where a conversation occurs rather than a presentation. Even if you are the only one speaking, investors respond in thoughts. Try to anticipate what our thoughts might be. If you can catch our thoughts, then, you can prepare the right information presented in the right order. Example: “We plan to expand to the mobile app market… (investor thoughts: When? ) …after we have a market penetration of 22%.” (investor thoughts: Good. )
4. Branch Like A Tree.
Pick and choose what is the most important point about your idea or company. Then, branch from that single idea into other relevant points. Like trees, the neurons in our brains grow like branches. The US Navy did a study on the attention span of new recruits during training lectures. They learned that the average capacity of paying attention to a single subject is 18 minutes. They also learned that those 18 minutes could only be achieved if the lecturer stayed on points that reflected the core idea. Example: If you want to pitch why your restaurant should have a food truck. Mention the food with every new point.
When “conversing” your idea to investors, avoid the fancy jargon and speak in plain terms that everyone can understand. We want to see if you have the ability to sell your ideas not just to us, but to anyone. It is more important to communicate your ideas clearly than sound impressive. CEOs like, Richard Branson, Jack Welch, and many more use cleanspeak to effectively manage their company and their Board of Directors. Incidentally, if your title is CEO and you have no Board of Directors, you could be unintentionally misrepresenting yourself. Be prepared to defend the reasons behind your title.
6. Be More Than Prepared.
Thorough preparation is one of the greatest secrets to an award winning pitch. Pitch preparation is more than just knowing your pitch really well. It is about being prepared at every level to defend your ideas and why you feel you are the most qualified to accomplish them. Practice your pitch in front of the mirror, practice in front of your worst critic. Watch episodes of “Shark Tank” on Hulu.com and answer the questions you hear being asked. Answer them as if you were on the show. In the “Tank”.
7. H³ : Heels, Hands, Head
The way you present yourself to investors can be just as important as what you have to say. When meeting someone new, many investors who network in powerful circles know to look at the 3 H’s: Heels, Hands, and Head. It is helpful to dress as nice as you can during a presentation. It shows investors that this is important to you and that you think about style and showmanship. This is not about pitching in a full executive outfit all the time. Its about your individual style. Looking good makes you feel good. And feeling good makes you less nervous and ready to converse.
8. Nervous, Yes. Fear, No.
There is nothing wrong with being nervous. People only get nervous when they are concerned about something deeply. Being nervous shows investors that you care a lot about presenting your company. Now, it is true that the #1 fear is public speaking. It is a more common than the fear of death, which ironically, is #2. If you start to get flustered, just remember that death is a rational fear, but public speaking is not. Nothing really bad will happen to you. Yes, your hopes may get crushed, but know that every failure is just another step closer to success. Believe in yourself and confidence will come.
9. “whiteboard” (whiteboard)
Unlike pitching at a networking event, you will have the aid of a whiteboard. Use it wisely. Try not to use it only as a form of repeating what you are saying. Use it to demonstrate “flow”. All companies operate and grow by accomplishing milestones, managing supply chains, and pivoting to compete during market shifts. Use the whiteboard to show us what words cannot. Study mind mapping and flow charts. See why they are used by every Fortune 500 company to communicate organization and strategies.
10. Giving Us Props.
You will also have an opportunity to use visuals to sell and further explain your idea. Have your visuals prepared before your pitch time. There will be no setup time allocated during the pitch. If you have a tablet, have the pages you want to show saved locally. Be prepared should Wi-Fi be unavailable. Be even more prepared by having a one sheet handout. Don’t give us a bound multi-page business plan. If you can pitch in 30 seconds, you can illustrate your point in a single page.
11. I Don’t Know.
There may be times where an investor asks you a question that you do not know the answer to. It is a social reflex to sometimes say anything rather than appear uninformed. Especially, when answering an investor. If you are unsure of something, it’s okay to say, “I don’t know”. We would rather hear this than something made up to appease us. Investors appreciate and respect honesty. It can go a long way in establishing that first connection with an investor. We also appreciate those who are always willing to learn. It cannot hurt to follow up your, “I don’t know” with a “but I will find out and get back to you.”
12. What Competitors?
There is one trap that many entrepreneurs fall into. It is a dreaded trap and the kiss of death during any pitch to a sophisticated investor. It is the trap of saying, “We have no competitors”. Even if by some rare chance you have zero competitors, be prepared to show us why and who your indirect competitors are. You will always have at least three forms of competition. Direct, Indirect, and Potential. Find them and understand why these categories exist. Knowing who your competitors are lets investors know that you are informed about your market, that you are watching your industry, that you are ready to compete.