shared from Experts Exchange |
The excitement in the room was almost palpable as local entrepreneurs congregated at Cal Poly University this weekend to pitch their ideas for a startup company to a panel of judges in the hopes of being selected for participation in the San Luis Obispo StartUp Weekend. Those chosen would spend the weekend coding, gathering customer feedback and building a business model, only to wrap their hard work up into a five minute spiel on Sunday to convince the same panel of judges to select their startup as the weekend’s winner. Of the 68 initial pitches made on Friday night, only 15 were selected and by the end of what was certainly a long and tiring weekend for the participants, only 12 teams remained to present their final idea.
In the end, the judges selected Haberdash, a Pandora-esque startup for fashion lovers, as the winner of the San Luis Obispo Startup Weekend. Don’t get me wrong, the concept of a fashion genome is interesting. However, it was the group’s clear, concise five minute presentation of their application that really impressed me. Having taught public speaking at the collegiate level for a number of years, I know the importance of good delivery. In the classroom, delivery means the difference between an A and a C; but in the startup world, it’s the difference between getting funded or going home empty-handed.
Here are fifteen tips for crafting a better pitch and getting funded:
- Lead with the need- If you cannot articulate a need for your product as well as how your product fills that need, then I have two words for you: hard pivot.
- Keep it simple- Your presentation should be easy to understand, well organized and largely free of complicated numbers or technical terms. Going into detail about your development platform will take up time you could be using to demo your product (and probably bore your non-technical investors) and big numbers are confusing to the listener when not given proper visual representation (refer to tip #3).
- Prepare a handout- If your market research includes big numbers, why not compile that data onto a handout that you can pass out to investors while you’re covering that part of your presentation? At the very least, make sure you write out the largest numbers on your PowerPoint deck so your audience can visualize the data as you discuss it.
- Demonstrate customer validation- By the time you’re ready to make a pitch, you should have received feedback from a lot of potential customers. Tell your investors how you incorporated customer feedback into your overall product development. And be sure to tell them if a potential customer mentioned how much he/she might pay for your product (they’re gonna ask you that question anyhow, so you might as well offer up the information).
- Define your business model- This sounds like a no-brainer, but sadly many folks figure that if they have an interesting product, they can figure out how to make money off of it later. Unfortunately, that’s only true for a select few (ahem, Quora). Investors are interested in your business model because the more money you make, the more money they can put back into their pocket. While advertising revenue or charging 99 cents for an app is certainly better than nothing, you should think about how your company can make recurring revenue or how you can target enterprise clients with deep pockets.
- Know when to shut up- After you’ve given your pitch and investors are done asking you questions, it is probably ok to interject one more thing about your product that you left out of the initial pitch. However, It is not ok to tell investors five more things they should know about your product. If you have that much more to say, your pitch was probably lacking in the first place, so your best course of action is send a follow up email and pray for a second meeting.
- Don’t get defensive- Investors are going to ask questions and make comments about your product because that’s their job. While you might not like what they have to say, it’s important to keep your voice at an even tone when responding–if it’s necessary to respond to their comment at all. If you don’t have an answer to their question, don’t try to evade it (they will see right through you), simply say something like “I didn’t come across that information in my research, but I’ll be happy to follow up with you about that via email.”
- Talk about marketing- One recurring question I heard at SLO Startup Weekend was “How do you plan to get your product in the hands of your customers?” Think about this question and incorporate an answer into your pitch or be ready to give a response when asked.
- Brand your product- Sure, you have a logo and a website, but have you really thought about the type of personality your product might have? If it targets a enterprise clients or C-suite executives, you might need to stick with a professional tone. On the other hand, a product targeting students could use more playful language to describe its features.
- Use humor- I realize that public speaking is scary to most people and when the livelihood of your big idea is on the line, the situation is all the more terrifying. That being said, incorporating a few (appropriate) jokes into your pitch will put you and your audience at ease. Laughter really is the best medicine!
- Discuss legal ramifications- This is particularly important if your product has deals with sensitive data or could directly compete with a particularly litigious group of people. Identify potential issues early on, do your research and inform your investors of why legal problems won’t be on the horizon. (Because they won’t touch your product with a ten foot pole if they think otherwise.)
- Estimate revenue & growth- Yes, this is different than talking about your business model. Investors want to know how much money you think you could sell your product for and how many people you think you can get to use your product within the first six to 12 months after launching. They may phrase a question about the latter by asking “How many people do you think you need to have using your product to reach critical mass?” Think hard about your answer, run some numbers and be realistic.
- Leverage social- Would your product integrate well with Facebook connect? Do it! Are you planning to market your app via social channels? Tell potential investors about it. Riding the coattails of a well-established social audience that likes to share new products is a big plus in the eyes of investors.
- Have a target- When it comes to your target audience, the more niche the better–especially if you are planning to make money selling advertising. Be sure to give specific details about your target audience and show potential investors why that audience has a need for your product.
- Move past your mistakes- Messing up might happen. Getting tongue tied is inevitable. But rather than break up the flow of the presentation to apologize for your foible, just keep going. If you need to restate something, restate it, but say you’re sorry and don’t admit to being nervous. Believe me, investors already know that.
- While I was working on this post, I asked the Twittersphere to send me their startup pitch tips. One of the best pieces of advice I received was from James Stayton a.k.a girimedia: “Be honest and make sure you do your homework. This is no place to learn to swim.”