3 Secrets To Pitching Investors (that they will never admit works!)
There’s lots of advice going around about how to create the perfect pitch. This is not about the perfect pitch. This is about secrets – secrets you’ll never hear from investors or advisors:
Secret 1: Don’t follow a template!
There are guides on what needs to be included in a pitch deck, there are templates to use. Don’t just copy-paste – be different if you really want to stand out. How should you do it then?
Start with your STRONGEST point, then cover the details in a pitch deck. For example:
Traction as the strongest point:
“5 million downloads in 6 months, we have traction…We are company X…it started with an observation I made with [customer] having [problem]…”
Problem as the strongest point:
“3 hours a day on transit?! That’s ridiculous, I’m creating a teleportation device.”
Demo as the strongest point:
“Check this out…[wow them with demo] then go into the regular pitch.”
Secret 2: Leave things incomplete
“Chin, you’re crazy. Investors need to know everything before they can make a decision to invest.”
True…but! You’re not trying to get married on a first date.
Your goal with a pitch is to whet their appetite and gauge their interest. You should deliberately omit some information to see if they are asking questions and trying to know more. You’ll know you’ve done a great pitch if there are a tonne of questions after and they’re excited! This will also help you identify the investors that are interested vs. the ones who aren’t.
Of course, don’t leave out the KEY points.
Things you MUST cover…
1. Who is this for?
Be specific. If it’s for everyone, no one is interested.
2. What is the problem you’re trying to fix?
Not a global problem, but the specific problem of the user, e.g., companies struggle with understanding their communication strategy and productivity vs. HR Managers need to monitor communication efficiency between departments to understand where to allocate resources. The latter is more clear.
3. What is your solution?
What are you building? What is your product/service? Bad example of describing your solution:
“Problem = takes long time to match users, Solution = faster matching”
“Solution = we allow users to match more quickly by providing a visual interface to identify their matches”
4. Show me how it’s done.
But don’t get too detailed or jargon-happy. And whatever you do, don’t spill your secret sauce.
An investor will be thinking “Are you taking my money to experiment? Or have you already validated what works and have a clear path to growth and returning my investment in multiples”. Ever notice all pitches have great market size/opportunity? Don’t spend too much time on top-down projections of Total Addressable Market (TAM) or Service Addressable Market (SAM). Instead, highlight TRACTION, use bottom-up predictions to highlight growth trajectory. Your ideal investors SHOULD be familiar with the market opportunity, if they aren’t, you might not want to take their money.
6. Why you?
Team, experience, and how you differentiate from the competition. What is your secret sauce? Tip: you might want to address this earlier in the pitch if you’re working in a crowded space.
7. The ask
Always have an ask. And don’t forget to list your contact info on the last slide. If you’re raising – how much? Leave out valuation and term details (these are things that are meant for a discussion and negotiation).
Secret 3: Don’t attend pitch events
I generalize here. But the point is, would you stand on the side of the street and try to sell your product/service to any random person that passes by? If entrepreneurs understand the importance of defining their target customers, why do they make the mistake of trying to raise money from ANYONE who will invest?
You’ll actually speed up your fundraising process massively by starting out with defining your ideal investor and treating it as a sales process. You might end up going to a pitch event if you know that’s where your investor is most receptive to ideas, but don’t go for pitch events with the goal of raising from all the investors in the room – it’s too much a mixed bag, and there are much more efficient ways to spend your time.
CAVEAT: I’m not talking about pitch practice events, which I definitely strongly advocate for, even if entrepreneurs aren’t raising their round. Pitch practice events, like Volition’s Pitch Nights, help with publicity and allow you to better define your value proposition and how to position yourself with investors.
Top Secret Secret: Stalk Your Investor
First off, there’s a difference between your Pitch Deck and your Slide Deck. Keep your pitch deck light – it should be designed to support your in-person pitch. Slide Decks are the detailed version you forward through email.
When you do send your slide deck, take up stalking. Send it out in a way that’s trackable https://www.orangedox.com/ or most CRM tools provide email tracking and give you good insight on who’s showing interest (how many times they’ve opened the email, shared it etc.)
So there you are, 3 tips to pitching investors. Stay tuned for my next article on how to catch a unicorn…investor that is.
Are there any tips you would add to this list? Let us know!
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January 16, 2019 @ 6:00 pm - 9:00 pm PST
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Chin Hing Chang, Head of Growth @ Spring
Chin mentors employees looking to start a new venture and non-profit organizations looking to spin out a for-profit venture. At Spring, he has helped our 450+ entrepreneurs launch over 230 companies. As a speaker, Chin focuses on ACTIONABLE advice and processes, not just the motivational fluff, and have presented at various conferences and companies including Protohack, PVCC, RED Academy, and many more.