Pitching an idea before seasoned VCs, and asking for funding, can be a nerve-wracking experience. Especially, first-time entrepreneurs may find it quite challenging to stand in a room full of other aspirants and grab an investor’s attention. It is indeed hard to captivate venture capitalists, and even harder to keep them hooked after a few seconds.
That’s because VCs typically receive hundreds of applications and pitch notes every day, with little attention to spare. So, the key to secure funding is to perfecting the pitch. While it isn’t necessary to adhere to a script, there should be a formulaic approach in place.
Studies show that a well-rounded pitch should be not only unique, but also narrates the brand story. Here follows three expert-approved tips to win over an investor in just three minutes.
Pique Their Interest
A pitch is not an extended version of the ‘About’ section of your startup’s website. Instead, the pitch should include a brief introduction of the company, the problem it solves and the market size. Your goal is to pique the audience’s interest.
Once they are hooked, build on the interest to provide additional details about your company, be it the USP or the technological framework. It’s important to understand the difference between a boring pitch and an intriguing one.
Long sentences and jargons are a buzz-killer – stick to short, snappy lines without delving into too many technical details.
Another common mistake entrepreneurs often make is taking a one-size-fits-all approach. What has previously worked with an angel investor may not resonate with an industry veteran.
Do some research to understand how you can personalize the pitch so that it caters to the specific audience. Sometimes, a little effort goes a long way.
Tell Them A Compelling Story
If you’ve got a story to tell, include it in the pitch.
It can be about anything – the break-through moment when you first came up with the idea for the startup or a particular challenge you’ve faced while setting up the business.
But, keep in mind that brevity is the key. The story should be engaging, leaving the investors wanting for more. More often than not, entrepreneurs tend to insert unnecessary details into the story, only to lose the interest of the audience.
The main reason anecdotes work because they are crisp, relevant and to the point.
Straying away from the topic won’t do you any good. It’s also crucial to tell the right story to the right audience. If your startup sells baby food, tailor your narrative to target the investor who is a first-time mother. Timing is as crucial as the messaging.
Save The Best For Last
The objective of any pitch is to stimulate continued interest. You don’t need to cram everything in the pitch. Rather, use it as an opportunity to initiate a relationship with the investors and engage in an ongoing conversation.
While a tell-all pitch can only work in some cases, you need to offer more. You can include some metaphors, phrases and example without revealing the best part.
It’s all about cherry-picking the material and deciding what to include in a three-minute pitch. The messaging should just be interesting enough for the audience to pick up the conversational ball.
A pitch should never disclose the whole story, but it should be used as a hook.