A powerful fundraising pitch can sway investors to choose you—even if someone else has more traction.
Most investors are more likely to fund someone who gave a powerful fundraising pitch over someone who has more traction but whose pitch wasn’t as compelling.
The pitching skill—and it is a skill—gives you a real advantage over other entrepreneurs who are not as prepared or savvy.
A powerful pitch takes planning and practice, much like learning a new dance and it is a Fundraising dance.
1. Study the art of the pitch
A common mistake is going into a pitch unprepared. A pitch is a story—your story—and there is an art to telling it well.
2. Know who you’re pitching to
When you’re pitching to a venture capitalist, remember that you’re pitching to a person and not a company. Find out as much as you can about the person. What do they care about? What kind of entrepreneurs do they fund? What numbers and metrics matter to them most? Read their blogs, Twitter feeds, and find out everything you can on and offline.
When REO Capital is fundraising, doing extensive research not only made my pitch better, it also helped me feel more comfortable, since I knew what they might find persuasive and meaningful.
3. Step outside your story
Every great pitch is a story with an arc. You are the founder of your business and that makes you uniquely qualified to tell it.
The familiarity that comes with living our stories can make it tough to find the right arc. We can give too much or too little detail in our effort to share enough while being succinct and impactful.
A good way to see whether you’ve got a powerful story is to pitch to someone outside your company and then have them pitch it back to you. If they don’t “get it,” can’t say it back easily, or get important facts or details wrong, it means your pitch needs polishing.
4. Stand out from the crowd
-You won’t be the only entrepreneur pitching to these investors. So how will you make yourself stand out?
-Know your customer really well. Build a customer avatar and be prepared to speak about him or her. You can even include the avatar in your deck. Speak with great knowledge and depth about who your customer is. Of course you’ll want to cover the standard demographics like age and gender, but you’ll also want to discuss preferences, paint points, and spending habits.
Demonstrate that you’ve gotten traction. It’s important to show that people need or want what you’re offering. A powerful pitch with traction will make you an attractive double-whammy for investors.
-Know your numbers inside and out. Forward and backward too; I can’t stress this one enough.
5. Practice, practice, practice
This one sounds obvious, I know, but you’d be surprised by how many entrepreneurs I’ve met that don’t take this crucial step. And I mean practice aloud. In front of an audience. Even your kids.
The number one most important thing you can do is practice — constantly, continuously, adaptively. This might sound like common sense, but a lot more is involved than most people think.
Public speaking coaches recommend you do three rehearsals for any important pitch: one for content, one for presentation, and one for confidence!
Practicing aloud will help you pinpoint issues so you can work through them before you’re in front of a potential investor. Instead of sweating through your pitch, you’ll be able to deliver it with grace and ease.
The first thing to know is that no pitch is static. It evolves based on who you’re talking to, where you are, what you need to get across.
“You have your one-minute version, your 10-minute version, your hour-long version,” says John Denes. “Some people think this means having the same story edited to different lengths, but you can’t do that. It’s impossible. There’s no way to compress an hour of material into a minute and still speak with the same passion. You have to have a new approach for each one of those situations.”
On top of that, your pitch has to accommodate constant learning. Every day you have new information to work with. You have a better sense of your market, new hires with new capabilities, ideas that have only just now bubbled to the surface. Your pitch has to be as dynamic as your startup itself.
You can’t just practice your one-minute, or ten-minute or hour-long pitch over and over and over again. You have to consider what it will be like to read a room, to read investors body language, absorb the truth of the moment and adjust accordingly, John Denes says.
The best meetings are the ones where the VCs in the room want to take this journey with you — and to ensure this, you have to hit all the stops they’re anticipating. “Lay out the map for them at the beginning: ‘I am going to talk about engagement; I am going to talk about monetization; I am going to talk about our team and features and potential competitors,’” John Denes says.
You may walk into a meeting with 12 slides — he recommends 12 — with the plan to touch on each of them sequentially. But more often than not, an investor will ask to skip slide two or jump ahead to slide eight.
You might be in control of how to tell your story, but you also need to read the room. If they are trying to pull you toward one topic, listen to them and adjust accordingly but keep the story’s structure intact. You have designed the story to build toward the conclusion that they have to invest in you.
They’re not really investing in your company
They’re investing in YOU. So if you’re ready to take your pitching skills to the next level and want to learn how to close more, then you need to Hire REO Capital – A Placement Agent for Emerging Managers and Established Managers.
This article was assisted by Julia Pimsleur