You have a one million, no, one-billion-dollar idea, but you need capital to get started.
You don’t want to ask for a classic loan from the bank.
You are looking for the thrill of a partnership with someone with expertise that won’t give
you just the initial capital, but wise and precious advice throughout your entrepreneurial
journey.
You are looking for an investor.
You know there are amazing opportunities like Angel Investors and Venture Capitalists.
They’re always ready to listen to some good business ideas, the problem is... they receive
so many of them!
So how do you stand out?
Well, in this video, we will show you the 9 steps to create a compelling pitch that
investors will absolutely love.
Stick around to learn more.
And be sure to watch the entire video, because there is a bonus waiting for you.
We put this tip at the end so you can use it as an extension and apply it to the 9 points
in this list.
Enjoy the video!
1.
Pick up the right product and believe in it.
Lee Lalocca, one of the automobile executives at Ford, was responsible for the development
of the Ford Mustang.
He was a great executive and product developer.
He also said:
“When the product is right, you don’t have to be a great Marketer”.
That’s easy to picture, but committing and constantly believing in your idea is another
story.
Edison failed 1034 experiments before inventing the light bulb.
3 rockets of Elon Musk’s SpaceX exploded before the first success.
Colonel Sanders’s recipe was rejected 1009 times before he sold it.
What do they all have in common?
The right product and a strong belief in it.
They kept committing to their idea, using failures to study what to fix.
Keep this in mind and it will reflect on the way you pitch your idea to other people.
Now that you are ready to start, here is your second step.
2.
Grab the investor attention
It only takes investors 15 seconds to figure out if your idea is worth it or not.
Now, it’s important to understand that the first sentences you say play a big role here.
In the worst case scenario, investors will pay more attention to why you are acting so
weird instead of listening to what you have to say.
I know this sounds like a nice theory, but how do you put it into practice?
Well, with something called the “Ice-breaker”.
Imagine you are in the street, suddenly someone approaches you saying:
“Hey man, can I show you something?
I can do a triple backflip!
I swear, you’ll be amazed by what you’ll see.
Give me 5 seconds of your time and you’ll that I’m right”.
In this scenario, the dude might have freaked you out a little and you called the police.
However, imagine encountering another man, he says: “Hey, let me show you something”.
At that moment he performs a perfect and elegant triple backflip landing in total harmony on
the ground.
At this point you are probably blown away and you are more open to talking.
This is what it’s called a “dramatic presentation”.
That’s the best way to grab instant attention and interest from your investors.
Many of the marketers simply tell how good they are, why they are the best, or how their
competitors sucks.
I’m not saying you should perform a triple backflip in the conference room, that would
be quite awkward.
But bringing data, statistics, and showing astonishing successes that you have gained
with your idea is the best way to start.
If a photo is worth 1000 words, a video is worth a million images.
Use videos and engaging presentations for your pitch.
Google slides is a great tool you can use.
If you sell a product, be sure to have a prototype with you.
And remember, don’t simply make your investors do a tour and show all the little benefits.
Put it in their hands, and if it is valuable, the product will sell itself.
Remember what we have said earlier: “When the product is right, you don’t have to
be a great marketer”
3.
Start with a problem
We could stay here hours talking about the different strategies you could use to sell
your idea, but it would all be useless if you don’t remember this thing:
People buy something to solve a problem.
Point out immediately what problems your idea solves, and who the intended user is.
If it doesn’t solve any…
Well, that is a great problem.
Let’s say you’re launching your business that sales Light blue Glasses, the ones that
protect you from computer screens.
That's actually something that solves an existing problem.
And it will be more and more relevant in the future.
You could start your pitch with something like this.
“Do you know that since the Lockdowns started, half of Americans are said to have spent more
time in front of screens?
And 38% of them have also declared that their sight has worsened.
This problem is set to rise since smart working has become a new reality for many people.
In the long run, they could have permanent sight problems.
But not with these glasses…”
Notice how you don’t hesitate to underline the pain point of your target.
The “pain point” is simply the problem of your niche, don’t be afraid to exaggerate
and emphasize it, only in this way, will you show the investors that you have perfectly
understood your target.
Once you have stated what the problem is...
4.
Talk about your solution
Your solution should follow as a natural fix to the problem that you have just described.
Of course, you might not be the only one who provides the same solution.
There will always be someone that will compete with your product.
And don’t trust the ones that say “No, we have no competition”.
Because they are telling a big lie.
The CEO of Netflix, Reed Hastings, said that “Sleep” is one of their biggest competitors.
It might sound crazy, but think about it: if people sleep, they can’t watch Netflix.
You’ll always have an obstacle to your solution.
So, the best way to go around it is stating your “USP.”
This is a little acronym that marketers love, it means Unique Selling Points.
They are the main features of your product or service, and they are things that no one
else but you can provide.
The USP is usually a statement, or also a catchphrase.
The USP of Domino’s Pizza is:
“You get fresh, hot pizza delivered to your door in 30 minutes or less, or it's free.”
This is an excellent USP because it’s transparent and it gets to the point.
There are no other companies that can promise such an efficient service.
Unique selling points are also great objections killers.
Domino’s Pizza statement is the proof.
The problem of their customers is that they are hungry, their objection is that pizza
might not come fast enough.
Their fears are immediately stopped by knowing they could have it for free.
A Unique Selling Point is the best way to build trust around your idea and impress investors.
However, new start-ups don’t have the resources for a Big USP.
But worry not, here is the solution for you.
5.
What’s the story of your company?
We all love a good story, and we become very attached to them.
Especially during a presentation pitch, investors want to know the person behind the idea.
Who are you and why did you launch the product?
What is your story?
Why did you decide to go for it?
Stating your milestones and achievements will help create trust with investors.
If you don’t have enough resources for a Unique Selling Point, stating a mission or
a “Brand Promise” is your best alternative.
What do you stand for?
What is your mission?
Why is your idea unique?
Eventually, you’ll realize the answers to these questions don’t involve just you.
After all, you are not a solopreneur in this project.
This leads us to point number 6.
6.
What’s the team behind the project?
When you present your idea to investors, you are also presenting your management team.
The idea is important, but what really matters is who’s going to make it a reality.
Investors get pitched dozens of times a day with the same exact idea.
How do they choose which one is better?
Of course, the answer is the one with the best team.
But don’t worry, if you are at the beginning and you are a solopreneur you can still make
a list of people that you have collaborated with.
These can be the ones that inspired you, the ones that gave you unique advantages to your
idea, even if they are not in the management team.
Show off all the work that you have done together.
But, there’s another thing you can do.
A board of advisors is a small group of people that offer advice and direction to a company.
Even putting your lawyer and financial consultant on that list can build credibility and trust
in front of your investors.
Reid Hoffman, the co-founder of LinkedIn said “If you’re playing a solo game, you’ll
always lose out to a team”.
7.
Easy and instant to get
Does your idea overcome the “Grandmother challenge?”.
Yes, it’s exactly as it sounds: If you explained your idea to your Grandma, would she understand
what you are talking about?
If the answer is yes, you have a “Crystal clear” proposition.
We love things that are easy to get.
That’s why companies spend hundreds of thousands of dollars to speed up their websites by even
a few seconds.
It is very important that you have what is called “An Elevator Pitch”.
Imagine you have prepared a wonderful 15 minutes presentation about your solar panel company,
but investors reject it.
On the way out of the building, sad and disappointed, you meet in the elevator no one else but Elon
Musk.
You know he’s a huge advocate of green economy ideas.
Immediately you realize that this is your golden opportunity.
The ride on the elevator will last just just 30 seconds.
You have to sell him your idea in that span of time, or else he’s gone forever.
An elevator pitch is a presentation of 1 minute, or better, 30 seconds.
It contains the main problem that your product solves and some other key ideas.
Opportunities are everywhere, but be sure not find yourself unprepared.
8.
Handling objections
Objections are not a “No” per say, they are simply requests for more information.
If you start looking at objections from this perspective, you won’t see them as a problem,
but as an opportunity to show the investors how prepared you are.
Let’s say you are presenting a pair of working gloves to a group of people.
The unique selling point of these gloves is that they have a slim and thin design but
they are also fireproof.
During the pitch, you are doing great, but suddenly one of the investors asks:
“You are obviously not targeting women with these gloves, who make the 80% of spending
decisions in an average family”.
This question could freeze the blood in many marketer’s veins, but not yours because
you did the proper research and you were waiting for that question.
In a moment, you take out of your bag a pair of fancy, elegant pink gloves, perfectly designed
for a woman.
You have just given the best impression possible in front of your investor, who remains speechless.
The quantity of objections that you can handle is directly proportional to the chances of
selling your idea.
Proper and deep research on the market you want to operate in is the perfect way to find
and then handle objections.
Remember, they are just questions, and you need to have an immediate answer for them.
9.
Say what the investor will get.
There’s nothing more frustrating for investors than asking at the end of a pitch: “Okay,
but what do you want from us, and what do we get?”
Be sure to put the emphasis on the exact amount that you need from the investors and how you
are going to pay them off.
There are 2 main ways to structure a deal with an investor.
1.
Debt.
It works like a bank loan.
Every year or month you’ll have to pay the investor a percentage of the investment, plus
interests.
2.
Equity
This is a big favourite of many investors.
So, in exchange for the loan, you don’t have to give them monthly or annual payments,
instead, they’ll own a part of your business.
You can pay them with dividends, or by giving them a percentage if you sell the company.
If your company is worth one million dollars, and an investor finances it with 100,000 dollars,
you could reach an agreement giving 10% of the company to the new investor.
The take away here is be immediately clear on this point.
Bonus
Great!
If you are at this point, it means that you have an entrepreneurial spirit and you are
looking for ways to get your idea off the ground.
You deserve this bonus tip.
Notice that you can apply it at any of the 9 points that we have just listed in this
video.
The tip is: ask questions, a lot.
Do you know how the average pitch ends?
The entrepreneur finishes his presentation, he turns to the table with the investors,
and then says: “Is there any question?”
Well, I’m happy he’s excited about taking questions, but it should work the other way
around!
Remember what we said about objections: Asking questions is the best way to find out what
investors are not so sure about your project.
Start from there and build your road to their commitment.
So, what do you think about this list?
What’s your favourite point and what question would you add to it to make a bulletproof
step in your business pitch?
I’d love to know what you have to say!
With that said, have a great day you guys and I’ll see you all in the next one.