The goal of any startup is rapid growth and scaling. For rapid growth, investments are needed, and with each financing round, their volume only increases. The critical stage in the development of a project is the search for and attraction of investors.
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Financing and the ability to conquer the market depend on whether the startup can build a strong relationship with an investor or fund. For this purpose, a business pitch is needed.
What is Business Pitching?
In baseball, the pitcher is the player who throws the baseball from the pitcher’s mound toward the catcher to begin each play. In the venture capital world, the startup pitcher is the one who pitches the idea, and the investor decides whether or not to accept the pitch.
Business pitching is the art of making an accurate pitch and getting funds to develop a project. A structured presentation to potential investors is called a pitch.
The presentation’s success depends on how well-developed the idea is, how realistic the promises of profit are, and how persuasive the pitch is. It is also essential to understand to whom you propose becoming an investor.
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How to choose an investor?
An investor may be not only a source of financing but also an expert in the desired industry and markets of interest to the project. To find a person with the right experience, you need to make a list of potential investors and study their biography and the deals they have made. It is not only the field that matters but also the stage of financing the deals: some investors enter only in the early stages, while others invest in steadily growing projects.
An investor with experience in your line of business is not only more likely to get involved in financing but will also be helpful to the company in the future.
A recommendation from a mutual acquaintance who is reputable to the investor increases the likelihood of a deal being struck. Useful acquaintances who can introduce themselves to the right people, send a letter and give a recommendation are the most crucial resource for a funder. This is why it is important to actively and purposefully engage in networking.
Part of networking can be attending industry events. Attendance at the target event can also play a role in the introduction: there is a high probability of meeting a potential investor and presenting the project on the spot.
What Should Business Pitching Be Like?
The perfect business pitch looks like a hundred dollars on sale for one cent, and the promotion ends tomorrow, and plenty of people around the corner want to take advantage of it.
The business pitch should answer 5 main questions:
- Who are you, and what do you do? Prove that you are a professional in your field of business.
- What is your idea or business plan? Briefly, in simple words, explain the essence of your business idea. Show that you have in-depth knowledge of the marketplace and expertise.
- How and with whom will you implement the project? Show a detailed plan of action, the project’s development level, and a professional team.
- How much money do you need, and when will the project pay off? Show exact estimated figures.
- Why are you confident of success? Convince the investor that you have considered all the risks and details of the project.
Packaging this data correctly and presenting it to the investor in as concise a timeline as possible is essential. Among startups, business pitching is one of the most popular growth hacking techniques.
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Best Practices for Business Pitch Writing
For the business pitch to be effective, choose the proper format, build your speech competently, set clear goals for the conversation, and address the relevant investor. If you aren’t sure about your writing skills, you can order writing services by Essay Writer. What’s important to consider when writing a business pitch:
Know in advance who you will be speaking to
The audience may include potential investors and seasoned experts from various fields. Conduct in-depth research on investors: study the audience’s competence and investment portfolios, analyze their past and current projects, and pay attention to their hobbies and humor. The more information you gather, the greater the chances of attracting investors.
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Structure your presentation
Pack all the necessary information and remove unnecessary details, leaving only the most important. The story should be coherent: the problem, the solution, the arguments, and the conclusion. Put yourself in the investor’s shoes: would you be interested in your business pitch?
Avoid lengthy descriptions of complicated processes
Transparency, clarity, and simplicity of wording are more critical. Take care of the listener – make your presentation as straightforward as possible.
Collect documents and financial reports
Do not talk about the project as the most unique and innovative. Investors are interested in facts and figures, not hackneyed fantasies about super profits. Persuasive speeches may be interesting, but an investor will decide to finance a project based on facts. Make sure that all necessary papers and reports are in order.
Prepare for uncomfortable questions
Tune in to answer clearly and to the point, and don’t get confused or irritated. A calm reaction to criticism and the ability to maintain composure in a stressful situation will play into your hands.
Work on your visuals
Think about the design and structure of your slides: indicate key points and graphs, support your words with figures, and maintain a consistent visual style. This will make it easier to perceive your presentation.
Remember your appearance
A neat suit that is not overloaded with details will be just right.
Develop a plan B
Prepare an alternative version of the pitch for the presentation: change how you pitch and shift the focus from problem-solving to financial gain. Choose the option that best “hits” the audience.
Prepare different presentations for different situations: for public speaking, for mailing, for the client, and the investor. Choose the format, volume, and specifics of the information for each case separately.
The goal of business pitching is to get investors interested so they will want to learn more about the startup and then finance it. But it is helpful to learn how to pitch not only for entrepreneurs but also for managers.
Best Practices for Business Pitch Delivery
As a rule, only a few minutes, five or seven at the most, are allotted to business pitching. During this time, you have to gather your experience with the project and convey it to the audience as clearly as possible. During the business pitch delivery:
Be calm and confident
5 minutes on stage is not torture. Think of them as your finest hour, a chance to show off and share ideas. The easier you feel, the easier it will be for the audience. These people came to listen to you, learn something new, and not mock you. The audience is on your side.
If it’s too bad and you can not calm down, imagine that everything is over – so it will be easier to survive stress.
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Do not read from a piece of paper
It is acceptable to use cards, but the more eye contact with the audience, the better. If you do not look into the hall, the hall stops looking at you. Also – don’t memorize the text by heart. Memorize your talking points and leave room for improvisation. The audience should feel that you understand what you’re talking about. Still refer to the slides occasionally so that the presentation doesn’t exist separately from the speech.
Choose the right pace for your speech
Don’t rush or hang up. Take pauses to put emphasis and give listeners time to comprehend what’s being said and an opportunity to react.
Don’t walk actively back and forth
The audience will get sick. Think about where to put your hands. If you’re not a master of gesticulating and tend to rub whatever you can get under stress, put your hands into something innocuous (a pen, cards) or project-related in advance.
Tell everyone, not just one person in the room
There’s a great way: mentally divide the space into three parts and look at the tops of the people in the middle. Occasionally move your gaze from side to side. You’ll feel like you’re fixating on everyone individually, but you won’t have to look at anyone. Respond to the emotions of the audience.
The beginning and the end are essential in a presentation
In the beginning, say hello and introduce yourself to the audience. In the end, thank the audience for its attention and invite questions. Don’t stay onstage too long, but don’t run off the stage in a hurry: count to five, smile, and return quietly to your seat.
The culture of little business pitching time has developed for a reason. Potential investors, who may include big businessmen or top managers, are usually very busy and listen to many presentations a month. They don’t have time to concentrate on other people’s ideas for a long time, and they need to keep different tasks in their heads simultaneously.
You can’t tell everything in 5-7 minutes, so you have to be able to focus on the important details: the problem, the solution, and the prospect of monetization. It’s not just the presentation that counts, but the storyteller’s personality as well.
Business angels investing in early-stage projects are investing in the team first. The founder and the team are the only points of contact for the investor at a time when there are still too many unknowns or untested hypotheses.