With the startup industry buzzing in India, a number of startups coming up in each industry and most of them looking for funding, it has become extremely necessary to make your startup stand out. VCs look at a number of startup pitches every year but they decide on funding only a few.
Asking someone to lend you millions of dollars to take your venture ahead is not an easy task. “It’s easy for entrepreneurs to believe that they need to pitch the billion dollar idea in order to get the interest from investors, but that’s not how it works,” says Scott Friend, managing director at Bain Capital Ventures.
There is no exact science when pitching to a VC but here are a few ways in which you can make your startup stand out !
You and Your Team are the most important Ingredients
It is a very well known fact by now that VCs invest in people and the team. That the people behind the idea are often more important than the idea itself and therefore you and your team are the most important ingredients of the deal. Every single investor is sold on perceived capability.
When talking to a VC the most important factor is to be authentic ! The biggest turn-off for a VC is entrepreneurs trying to be something they’re not. Being yourself also makes the pitching process easier because you are simply communicating what you believe. It takes the “salesperson” pressure off and helps you to relax.
According to Joe Medved, a partner at SoftBank Capital, one of the biggest mistakes you can make as an entrepreneur is not introducing yourself and your team before you pitch. Investors want to know who you are and what you’ve done before you ask for money.
“Especially at the earliest stages, the biggest bet is on the team. Establish credibility in your background to lend more credence to your pitch” says Medved.
Some of the points investors are known to look for in a startup founder are
1. How good of an evangelist are you going to be for the company ?
2. Are you the kind of person they would want to work for ?
Essentials for a good startup pitch !
According to the National Center for Biotechnology Information, at the U.S. National Library of Medicine, the average attention span of a human being is 8 seconds. You do not have too much time to spend on being vague ! Clarity always trumps persuasion. Keep you pitch as clear and concise as possible.
The focus should be on being understood. Imagine talking to a person who has absolutely no clue about your industry. The best pitches are the ones that can be understood by a 5 year old and a 50 year old at the same time. Keep it simple !
Practice Practice Practice like your life depends on it ! Practice in front of anyone and everyone you know. Use the feedback to refine your speech.
The scarce commodity for investors isn’t finding good pitches, it’s finding entrepreneurs that have real passion and real knowledge around the topic. Being able to show that you eat, drink, and breathe your topic is essential. Passion will ensure that your pitch is memorable, engaging and unique. Don’t be afraid to display your enthusiasm. It might be the different between a closed door and another conversation.
Crafting the Perfect Pitch
Hook the Audiences
Your audience hears a number of pitches each day. Have a very interesting start to your pitch.Grab their attention in the first 10 seconds. This will make sure that your audiences are hooked on to your pitch for the next few minutes.
Convey the Problem
Let your audiences know that a very important problem exists. Make sure that they understand the gravity of the problem. Let them feel the pain the problem creates. Make them eager to find a solution to this problem.
Propose your Unique Solution
Investors aren’t too interested in ‘me too’ ideas. Capture their desire by offering them something unique. Convey your unique value proposition in a strong and efficient manner. Tell them how you can make a difference in a way that no one else can.
What is your Traction ?
How engaging is your product in its market ? If you have built enough traction VCs will jump in line to invest in your offering. A number of companies are known to get huge investments in spite of number of other products operating in the same area only due to their solid traction.
Don’t Close the Conversation Completely
When you put forward your closing remarks make sure that you ask for a business card to get in touch again or ask for the next appointment. Do not completely close the conversation with no word about how this will move forward.