Table of contents
- 0.1 Who would I give my startup pitch to?
- 0.2 How to write a startup pitch
- 0.3 How to practice your pitch
- 0.4 Why do you need to prepare?
- 0.5 What questions should be covered before pitching ?
- 0.6 What are some mistakes that people commonly make when pitching?
- 0.7 What are the kind of questions that investors ask?
- 0.8 What’s it like to raise money from investors?
- 0.9 Conclusion
- 1 Don’t miss amazing tips!
This article will talk about how to write a startup pitch and what you need to do to be prepared for a pitch. So let’s get right to it.
What is a startup pitch?
A startup pitch is a short description of your business which you can use to present your idea to investors. Just like any other pitch, the purpose of the startup pitch is to convince investors that it’s worth their time (and money) investing in your company.
Who would I give my startup pitch to?
You’ll typically want to give a startup pitch in front of people in the tech industry, such as CEOs and venture capitalists. You’ll want at least one person from this group on board with you if you’re going to succeed in making anything happen for your company.
A startup pitch is the first impression you make on someone who may potentially invest in your idea. Whether they choose to invest or not, it will go a long way in determining whether they see your business as viable or not. Your pitch is what makes your business unique and it’s an extremely important part of marketing your product or company. However, there are some pitfalls that most entrepreneurs don’t know about when preparing their pitches.
You want to have the concept or idea behind your product (very high level) and how you plan to grow your business among other things such as who the competition is — don’t go into detail yet, but tell them why people will want it and buy it. Include who is already using/paying for similar products and how they’re using it. Don’t spend too long on this part. Remember pitches are long so don’t go into too much detail here.
How to write a startup pitch
The first step in preparing your pitch is to prepare a summary of your business. It’s not as hard as you think and there are many templates online.
The most important part of your pitch is what should be covered in it. Your pitch is not just for investors but it’s also for the person you’re presenting your business to. It would be a disservice to either of your audiences to put forth half-assed content.
For example, you wouldn’t show up to an investor with a pitch that focused more on the CEO than the business itself. This would be highly unprofessional and could easily ruin their impression of you and your business. Read tips on how to present a successful pitch here.
What to include in the pitch
a) The 5Ws of which problem you are solving in your pitch – “who, what, when, where and why” – in your pitch. For example:
Clearly state which problem your startup will solve in a clear and concise way.
For example in the problem statement stated below, you can identify the different W’s in the statement.
People who are in offices/homes need groceries chosen and delivered to their offices/homes whenever they order because they would like to reduce the hustle of making a choice and going to buy the groceries in the grocery store because they need to save time and cook on demand.
who - People who are in offices/homes what - groceries chosen and delivered where - their offices/homes when - whenever they order why - they need to save time and cook on demand
b) Include your business as a solution to the problem you have described in a) and how it helps.
My business “GrocerGrocer” is a food delivery app that offers the best of both worlds. The groceries are chosen and delivery is made by GrocerGrocer itself, not some random courier service. I know you’re asking yourself why I’d want to use this thing called “GrocerGrocer” but this is your first impression of what my business is about.
c) How big is our potential market? This is essential because it shows people that there is a demand for what you are trying to do. If there is no market for the product or service, then people won’t be interested in investing in your business.
d) What key distribution channels do we have? Distribution channels are one of the areas that can be overlooked in a startup pitch because most people don’t think they’re a must have. However, they are very important because they help establish a relationship between you and an investor.
e) How do we use these distribution channels to reach our target audience? This section is crucial because it will not only give you insight on how to use these distribution channels effectively but also show people that you have expertise in this area which will give them confidence in investing into your business.
e) How are we going to make money? This is another key question that needs to be answered. It’s the reason why you are doing what you’re doing in the first place. If you can’t answer this, then there is no point in preparing for your pitch. If you’re not making any money in your business then it’s inevitable that your business will fail in the long term unless of course there is some sort of funding involved in what you’re trying to do.
f) It’s important to include why your startup is different from other startups targeting the same market?. One of the best ways to do this is by comparing how your startup is using technology to solve a problem while showing business growth potential. The way you write this part of your pitch can go a long way in determining how much money you are going to get from investors.
How to practice your pitch
Practising your pitch is one of the most important things you can do. PowerPoint is one of the best way to put together what to talk about in the pitch. Powerpoint allows one to quickly edit what they want to say about the startup and saves valuable time by not having to worry about formatting the slides. When you are finally comfortable with the presentation, go through it multiple times before making changes accordingly.
The first thing you need to focus on is making sure that your presentation is easy for people to understand and fun for them (if you can manage it). Next, you need to make sure that it is formatted correctly. This means that you should ensure that you’re font colour is consistent throughout the pitch and your formatting doesn’t break down.
Time yourself while presenting your pitch. This will allow you to do edits on your pitch after you’ve presented it to multiple people and see what needs to be changed, reworded or cut from the pitch altogether. The time for this exercise is also a great way to test the effectiveness of your pitch because this will give you an idea of how long an investor may spend listening to it.
Why do you need to prepare?
Preparing for your pitch is key. This is because there are many issues that can occur while presenting the business, the problem it’s trying to solve or even just getting to the pitch room.
The most important thing you should prepare for however is what you’re going to say in response to people who ask questions about your pitch. Having an answer ready about why you’re doing what you’re doing is crucial because this will help with the person’s next question which will inevitably come up during a pitch.
What questions should be covered before pitching ?
What problem are we trying to solve? This question can be easily answered by understanding the core problem our business is trying to solve. For example, this startup solves the need for catered food delivery in your office. Or if it’s a problem that people have had since the invention of time, it could be something like “How can I get my friends/colleagues to arrive on time for meetings?”.
Why is this issue so rampant? This question is also one of the most important ones. It’s the reason why you are doing what you’re doing right now. If you can’t answer why the problem exists, how are you going to solve it? Understanding the root cause of the issue is important because it gives an idea of how to fix it. Starting with understanding why something is wrong gives people an idea on what needs to be fixed. It’s like if you ask someone “What’s wrong with America?” and they can’t come up with one big thing that could help improve this feeling of patriotism, then they will probably not be able to fix the issue at hand.
The target audience is often at times overlooked when pitching a startup. You need to find out who your target audience is, what their pain point is and try to cater to this aspect of their life. This will help people who are interested in investing into your business become more inclined to invest because they’ll know exactly who you’re trying to give the money too.
You should be prepared to answer about your distribution channels also
What are some mistakes that people commonly make when pitching?
One of the most common mistakes people make while pitching is not being clear with who you’re talking to about what they need to know about your business. For example, if your business is trying to be a web app that’s going to revolutionise the way people drive, but you’re pitching to investors who are only interested in investing for businesses that have physical operations, it’s not going to help with getting money from them.
Something else you need to be careful about is whether your pitch is something you want someone to buy or invest into. Another common mistake that people make is they try and sell their business rather than just pitching their idea, product or company. Explaining a problem is often a lot better than trying to lead investors into thinking that your startup will solve a problem they didn’t even know existed.
Not answering questions correctly can also work against you. Make sure that you attend and prepare for all questions. You don’t want to find out that the investor has further questions just after arriving at your pitch room.
Answering too many questions before pitching can also be a problem. Pick and answer the fewest answers possible and just say “This is what I’m doing now, what do you need help with?” If people have more questions after you’ve covered everything, then just tell them that your business is working on it right now.
In the end, remember that everyone’s pitching is different and no matter what questions they ask, they’ll be looking for specific answers to give them an idea of what your business does and how it will work. Just try and keep in mind these few important things:
Listen to their questions and not what you want them to be asking. It’s easy to think that you know what questions investors are going to ask and it won’t be out of line if your answers are different than what they actually asked. However, the only person who knows exactly what they want to hear is the person asking the question. That means that you should practice answering all kinds of questions until you get a better grasp of how things go.
Everyone’s pitching is different and no matter what questions they ask, they’ll be looking for specific answers to give them an idea of what your business does and how it will work. Just try and keep in mind these few important things:
What are the kind of questions that investors ask?
One of the most common questions people ask when they meet with an investor is if the business is ready to scale. For example, if you’re looking to raise money for your start-up web app that’s supposed to help businesses track their expenses, then this question will come up.
It can be very helpful to know what questions people like to ask when they’re meeting with investors. This way you’ll know ahead of time what kind of questions you should prepare for. You should always keep in mind that no one can predict what questions people might ask and the only way you’ll find out is by practising your pitch. There’s no better way to see how things work than to actually try it for yourself.
Other questions will be asked based on the type of business you’re pitching. For example, if you’re pitching a company that owns and maintains websites, then they will ask questions about how you plan on scaling up your servers and increasing your production. Keep in mind that investors will always ask the questions that are most important to them. This means that they will be asking questions based on what they think is most important to them. If you don’t give good answers for the questions you’re asked, then the investor could walk away from investing or even worse, never come back.
The main goal of all this questioning is to see if what you’re doing makes sense and how it’s going to go mainstream in the future. The one thing that can make or break your pitch is knowing exactly what information investors are looking for when they ask the right questions. In the end, without knowing the exact questions that investors ask, you will be blindly pitching your idea and this will leave a bad taste in their mouth.
What’s it like to raise money from investors?
When you meet with investors, there are going to be several different people in different rooms. The common purpose of these different rooms is to help everyone get a better understanding of where the other party stands on the investment terms and conditions. If an investor has doubts about your business idea or feel that things aren’t clear enough, they will look at other people in the meetings and determine if they agree or disagree with what you’re saying.
This means that if an investor agrees with you and sees that another person is of another opinion, then they will agree with the person who they believe is right. This might sound like a lot of work on their part, but it’s actually something that helps them save time and money on deals they know aren’t going to go through. If you can come prepared and answer all questions without hesitation, then the investor will see that your business idea is close to completion and more than likely offer you a deal on the spot.
Keep in mind that there are going to be investors out there who won’t want to waste time talking about things they think are wrong with your business idea. The one thing that can help you on this type of meeting is to have questions ready. You might think that this goes against everything you’ve heard, which is to listen up and let the investor ask all the questions they need for their decision, but it’s important to remember that you’re there to get a deal done.
This means that if the investor sees that they’re wasting their time talking about what they don’t want to talk about or if they feel like you’re not showing them how your business idea is going to make money in the future, then they might switch up their investment strategy on you.
There’s a lot to be said about the people who invest in businesses. They’re going to be looking at all sorts of different things while they’re listening to your pitch. In the end, you should keep in mind that their job is to find out what makes your business idea tick and if it’s something that can be profitable down the road.
The one thing that can help you on this type of meeting is to have questions ready. You might think that this goes against everything you’ve heard, which is to listen up and let the investor ask all the questions they need for their decision, but it’s important to remember that you’re there to get a deal done.
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