Your Partner for Bookkeeping and Controller Services

Contact Us

What are you interested in learning more about?

×

Supporting Strategies Blog

Tips on Writing a Winning Pitch | Supporting Strategies

Share:

The One Thing That Separates Great Pitches from Amateurs

|

Always remember: You're selling investors an investment, not a product.

After writing more than 20 articles on pitching, I was asked if I could sum up my advice in a single sentence. My first reaction was snarky: "Yes, my advice is read all the articles on pitchingangels.com."

But while working with various startups over the past few weeks to help them prepare for their pitches, I realized I frequently said, "The one thing you need to keep in mind is …"

You're Not Selling a Product — You're Telling a Story
When getting started raising money from friends and family, and even into pre-seed, people are investing in you because they know you, they want to support you, they love you and they want you to succeed. Or you're building something that they believe in and want to do their part to bring your product to fruition. In this early stage, you're selling yourself, your potential and your vision.

But once you start talking to professional investors, whether angels or venture capital firms, you're not selling your product, nor your team, nor even your traction. You're selling an investment in your company. Your pitch needs to be a story about how the investor makes money.

Practically, that means the pitch is structured a particular way, starting with the context, then showing the evidence and leading into the deal:

  • The context is the problem, your solution and the market size. The point is not to sell the product or even explain it in detail, but only to convince investors there's a real need and a big opportunity. Most amateurs stop here or add a couple of extra slides on team and competition because someone told them they had to. Investors are not customers. Let me be blunt — professional investors don't really care about your product. It could be the best product in the world, but if the company won't go public or get acquired at a high multiple, it's a bad investment. Instead of showing investors how wonderful your product is, get them excited by proving you solve a real need for a large number of potential customers.

  • Next is the evidence. You have the perfect team to solve the problem and build the business. There are other people in the space, but you have a better solution as well as patents or another moat to keep the competition at bay. Best of all, you have traction to validate that your solution is what users need.

  • Last is the investment. How large will the business grow in five years when you're ready for acquisition? Who is going to acquire it, and at what multiple of your revenues? Finally, how much are you raising now, and at what terms? These are the types of details that investors need to evaluate your investment. Without these details, it's like listing a house on the market without an address or price. It might be a great house, but without knowing how much it costs and the comps for the neighborhood, there's no way to evaluate whether it's a good deal or not.

Pitching Is the Ultimate Form of Money Ball
Throughout the pitch, sprinkle in anything you can to convince investors this is a great investment that will generate a huge return. Do you have people on your team who've already succeeded with a big exit? Non-dilutive funding that multiplies investors' money? Big-name investors already signed up? Industry giants already discussing with you the potential for acquisition? If you've got 'em, be sure to use 'em.

By the end of a great pitch, aim to have investors drooling. You're the one investment that can't possibly fail, and you'll be the one company in their portfolio certain to have a big exit and make up for all the flops. You're the one opportunity they'll regret later if they don't invest now.

To get investors begging to be allowed to invest in you, use your pitch to prove you're offering a chance to get into the greatest investment ever.

DC Palter

Author:

DC Palter

DC Palter is a serial entrepreneur, angel investor, and startup marketing specialist. After two successful exits, DC is now a top writer on Medium for startups and venture capital, with his articles collected on https://pitchingangels.com. His Silicon Valley mystery novel, To Kill a Unicorn, is being released by Pandamoon Publishing.

Legal and Tax Disclaimer

This website is created by Supporting Strategies to provide general bookkeeping and accounting information only. Supporting Strategies does not provide tax, legal or accounting advice, and the information contained herein is not intended to do so. As such, the information provided should not be used as a substitute for consultation with professional tax, legal, and accounting advisors, and you should consult with a tax, legal and accounting professional before engaging in any transaction.