A detailed guide to writing a successful business pitch
Whether you are looking to explain about your start-up to a potential investor, or are the chief of a multibillion-dollar company wanting to diversify your organization with new operations, you’ll need a presentation of what you have in mind; a business pitch. It is necessary to get the business pitch right so you can in turn get the preferred investor of your choice.
A business pitch is not a business plan!
In layman’s terms, a business pitch would be what many people refer to as a plan of action or business plan. However, a business pitch and a business plan vary greatly as far as technicalities are concerned. To quote Guy Kawasaki, “The purpose of a pitch is to stimulate interest, not close a deal.” A business pitch is most often a presentation consisting of 10-20 slides, while a business plan is more like a document spanning anywhere between 1- to 100 pages.
A business pitch is used to pique the interest of your potential investor. Once an investor has gone through your pitch and seems interested, you may send over the business plan containing the specifics of your venture and its operations. Some people get these both mixed up and present the business plan which is time-consuming and since investors’ time is probably worth a lot of money, they tend to lose their interest very quickly. Thus it is important to go for the meeting with a business pitch and not a business plan.
State the problem for which you have the solution.
A large number of business pitches would be about addressing a particular problem. It is also likely that the business proposition in your mind is also a solution to a problem. Be sure to include a concise description of the issue which you are trying to solve and its solution. Coming up with ideas or solutions to a problem in itself is a difficult task. It could only have been after a battery of brainstorming sessions you could be convinced of your idea. Now imagine convincing other people, that is your investors who probably have no prior knowledge to comprehend it, or the insight to see through the concern raised by you. Also, if your idea involves going up against an entity with a solution that could be a probable competitor, make sure to explain it to your investor why your approach would be better and marketable than your competitor’s.
Try to include schematics and flowcharts whenever possible.
Statistically, images tend to stick around in the human brain for a significant amount of time than plain texts would. So it would be in the best interests of both the investor and the presenter if the pitch were to include images or flowcharts. Or even better, try to incorporate an amalgamation of plain text and images, a schematic. This approach will help turn investors’ curiosity into their attention for you.
Employ a multi-level business pitch.
Some business pitches can be too intricate for some people to understand. It may be because your pitch contains too many technical terms, of which many would be just plain rubbish to some if not all investors. Or it could be that your idea is too elaborate, and you need to pare it down to its essentials. In either case, you will need to come up with a solution to intrigue or engross your potential investors. According to Scott Berkun, you can achieve this by giving your pitch a multi-level structure. You may execute this by formulating a 5-second, 30-second, and the much fuller 5-minute pitch. Each of the longer pitches must be built on the one preceding it to obtain a sense of continuity. Towards the end, you must take care that your 5-minute pitch has not strayed from the 5-second one you had proposed earlier.
Too many slides are not the way!
Some might think overwhelming the investors with a gargantuan volume of information may please them. As said earlier, a business pitch is a short brief about your company. Be that as it may, some keen people in an effort to win the investors over get over-enthusiastic and include too much information, ending up with business pitches having 25 or more slides. However, the saying “The More, The Merrier ” does not apply when submitting a business pitch. Sometimes, it takes only as low as ten slides to warrant the attention of your investors. A noteworthy example would be the founders of buffer.com, who got half a million dollars in funding with a mere 13 slides.
Try to present long term prospects.
Investors, once interested, will be keen on what would be the future plans for your company or venture should it succeed. Be clear and precise as to what you expect from the investors. Are you solely looking for the investors’ money to get things off the ground? Or are you looking forward to building a partnership with them? Also, they would like to know if you will put up your company for an IPO, or would you sell your shares and retire. Ergo, presenting just the initial stages of a company may not suffice, and it would be better for all parties involved to include the prospects of your company to avoid any friction in the future.
Never oversell your idea.
If there is one thing that investors frown upon, it would be their clients’ overselling of their ideas. If you were to do so, investors would be in the hope that your product will perform better than it actually would. And that translates to a lesser yield in a designated time. If the investor were to base their future on this supposed income, then what lurks would be a falling out between you and your investor. It is an undesirable outcome and can lead to all sorts of problems. In the best-case scenario, the investor backs out of your business. In the worst-case scenario, the investor starts legal action in the form of lawsuits for fraud against you and your business.
Include the downsides of your idea as well.
When presenting the pitch, try to encompass the possible downfalls of your idea as well. That can go a long way while securing funding for your proposal. If you were to keep the possible shortcomings from your potential investor, and they were to find out about it while carrying out their research, they may feel you are a scammer. This vague sense of bad faith would make your funding prospects bleak.
Improvise. Adapt. Overcome.
It is not always necessary that you obtain the requisite funding in the first few attempts of your pitching adventures. This is more likely if you are an incipient entrepreneur looking for investors. It can mean only one thing; that you aren’t doing something right. And that means it is time for a change in your stratagem. Change your approach, use better visual or auditory aids, employ better marketing strategies. Some investors had the misfortune to be rejected up to 10 times before they could improvise and obtain their funding. So never be afraid of change, and you may be well on your way to receive the backing you hoped.
Do your homework.
When going to propose a business pitch, research all aspects of the idea you are about to present. Investors are more likely to back the idea of a person who has in-depth knowledge of the subject at hand, rather than knowledge which barely scratches the surface. The same goes for the investors you are about to pitch your idea to. Thoroughly study about your potential investor and make sure your idea is in synchronism with their investment portfolio.
Do not try to impose your idea in the mind of the investor. You must be able to know when a notion has taken over their mind. Like in the movie Inception, an idea sticks in a mind only when it is fully formed and understood. So give your investors enough details so that they can comprehend it without much difficulty, but just about to the point where they can extrapolate it and understand for themselves. Also, care should be taken to avoid any form of misinterpretation that may drive them away. Be wary of overdoing it, and do not say anything that might push investors away.
Do not be needy.
However keen as you may be to see your dream kick-off, learn to accept no as an answer. Try to obtain the confidence (and the funding) from your investors based on the merits of your pitch. Emotions and business do not mix well, and you must keep out the former from the latter. Failure to do so may result in you and your business getting a negative impression, which may disinterest your future investors. Even worse, they may put conditions with malicious intent that you may accept in the spur of the moment to see your dream take off.
Practice makes perfect!
After following all the basics of a good business pitch creation such as length, conciseness, comprehensiveness, it all boils down to one key factor; you. You must be able to deliver the pitch in such a way that it is convincing to the investors. Do not merely read them out from the screen. Being able to present without looking at the screen instils a sense of confidence about you in the investors’ minds. It will also provide a perception that you are well versed in the subject at hand. Also, some people may find it perfectly okay to present or have no troubles while going through the lines alone, but face difficulties while demonstrating in front of a live audience. Practice sessions with friends, colleagues, and even family can go a long way while helping you prepare for your meeting.