How to Nail Your Investor Pitch and Get Funded

Hook your audience

Everyone has a short attention span, so you need to work for attention.

Lose your audience in the first five minutes of the investor pitch and they are probably lost forever. Kill it in the first five and you will be rewarded with attention for the next period as well.

This concept is all too clear for any form of entertainment. Ever noticed how any Bond movie starts out with a great scene?

Create a similar effect and come out guns blazing in your first five minutes. Ideal items to open up your investor pitch with are the following:

• A one-sentence explanation of what you do
• A short but powerful introduction to the opportunity
• The key facts introducing your business and the funding round (Stage of development/ traction, what you are looking to raise)

Once you have grabbed their attention, it is time to continue your pitch.

This is also a great moment to check in with your audience.

Take this moment to ask for prior experiences related to your company or figure out biases existing in your audience. This will allow you to tackle these issues head-on later in the presentation.

Don’t lose focus however and do not engage in any discussions at this point.

Tell a story in your investor pitch

People remember stories, not data.

When you do your investor pitch you should try to go beyond presenting the facts. Instead, you should try to present a clear narrative. Pitch and convince your investors of your vision by taking them through a story.

Any good story has the following three parts:

• Setting
• Struggle
• Solution

Use your story to explain your business and the data in a way that resonates emotionally.

Create the setting

First, you need to create the setting in which the struggle can occur. This is normally the shortest piece of your story.

In order to create a powerful setting, use the following tips.

Ask your audience questions

Do you know about …?

Have you ever met …?

Hands up for those that know …?

Try to trigger curiosity by asking a good question.

Put your audience in the setting

You want your audience to relive the pain of your customer that makes your solution so valuable. Include them in your story.

Excluded: I was with a group of people …

Included: Imagine being with this group of people …

Make the characters relatable

Ideally, you want your audience to relate to the main character in your story. Do this by using someone who the audience is likely to know, or by using the audience themselves.

We all know Greg, a great salesman who can talk anyone into buying what he’s selling, but terrible at following up at the right time and therefore losing out on a lot of deals …

Convey the struggle

Now that the setting has been established, it is time for the most important part of your investor pitch’s story: the struggle.

It is now all about making the audience feel the struggle.

If you do it right, they will just want to make it stop and invest in your solution.

Make the problem familiar

This is where some homework on your audience can come in handy. Try to use something from the world of your audience.

It’s just like when you …

Place your audience in the problem

Refrain from using “I” and “we” as it distances the audience from the group living the problem. Instead, make the audience the group that suffers the issue by using words like “you”.

Use specific details

Instill confidence in your investor pitch by using details. Also, use specific examples instead of statistics as they will make the story come alive.

Generic: Our average customer spends six hours per week filling in data prior to using Salesflare.

Specific: We took out a stopwatch to follow Greg and found that he spends 5 hours and 55 minutes filling in data.

Prompt your audience to feel

The goal of the story is to add emotion to the logic. So try to prompt feelings in your audience.

Imagine spending six hours each week filling in customer data …

Present the solution

Now that our audience is feeling the struggle, it is time to present the solution.

Let the audience create the solution by asking a question

Trigger your audience during the investor pitch to come up with your solution by themselves. People like their own ideas. Let them own it.

What if there was a way to …?

Show clearly how it alleviates the pain

Building from the struggle earlier, it should be clear how your solution alleviates the pain. Be specific and refer to the main character of your story.

Greg can now spend 5 additional hours per week on sales, representing a gain of 16% for only 360 USD per year.

Highlight the scale of the problem and potential of the solution

By now you should have convinced your investor that there is a problem and that you have a great solution.

The key missing piece is the scale of the opportunity created by your solution. A bottom-up approach works well with storytelling.

Greg is certainly not alone, in fact, [x] companies with [x] people have the same problem, representing a market opportunity of $[x]m.

Tailor your story

Custom fit your story for the audience and format of the investor pitch.

Leave enough time for Q&A

A great investor pitch is a conversation, not a presentation.

Leave enough time to engage in this conversation and limit your presentation to a third of the meeting.

The rest of the time can then be spent answering specific questions.

Decide which questions to answer in your presentation

Some questions might return in every investor pitch. Decide if they are best answered as part of the Q&A, or if you would benefit from answering them right in your presentation.

Be confident and believe in your story

From everyone in the room, you are probably the person who has spent the most time on the subject you are presenting.

This means that the investors, with their limited availability and lack of background, will have a hard time evaluating what you are saying in your investor pitch.

The first proof point of your expertise for the investor is your own confidence. You don’t convey confidence by saying that you are confident; instead, you do this by displaying it.

Definitely, do not seem nervous and apologetic. If you are building something great, you are doing the investors a favor by telling them about it and showing that you believe in it.

On the other hand, don’t be arrogant. Instead, try to come across as coachable. Recognize potential problems and be open to advice when you don’t have all the answers.

This shows investors that you are open to change where needed and that they can help you with their experience.

Ace the Q&A

Have you ever wondered how a famous CEO can stand in front of an audience and nail almost every question?

The answer is simple: a lot of preparation.

Create a Q&A file

It is hard to prepare for questions that you didn’t see coming beforehand.

Therefore, the first step of preparation is creating a file that allows you to track any relevant questions that you or investors can come up with.

The format is not important; just make sure that you can maintain the file and that you don’t end up deleting questions that might be useful in the future.

In the world of finance, my former habitat, it is not uncommon that this file is a spreadsheet with Q&A grouped per topic.

Let’s take a look at some tips to become a Q&A master.

Keep track of good questions

Now that you have created a simple Q&A file, it is time to keep track of good questions. Start right from the beginning, your pitch preparation.

It is not uncommon that your brain wanders off and comes up with a great question when you are preparing your investor pitch. Do not let them go to waste, but note them down, forget about them, and continue with your preparation.

Once done, take another look at your Q&A file and see if the questions are now answered by the pitch. If not, consider fine-tuning your presentation or prepare for the questions.

Be consistent

Consistency goes a long way when trying to get confidence from your audience.

It is not always easy though in a free-floating format like a Q&A. This is where preparation can really provide you with an edge.

As you answer the questions beforehand, you have the opportunity to check them for consistency within the overall story.

A good answer should provide a detailed, to-the-point, and factual answer, but also reference the overall story.

Take your time

Even if you are super prepared, there might be a few questions that you didn’t see coming.

It is important that you don’t feel obliged to answer immediately. There is nothing wrong with telling the investor that you need to think about it. You can also buy yourself some time, or even not answer and promise to come back later.

A great way to buy yourself some time is by asking clarifying questions.

If you don’t know, you don’t know

Sometimes buying some time is not enough and you just can’t come up with a good answer.

If that is the case, just admit it, but refrain from just saying something to get you out of the situation.

Definitely, do not lie or guess. Nothing kills your credibility like having to come back on your own words later.

Practice

As Y Combinator puts it; “there is only one preparation technique that truly matters: practice”

Not only will your delivery improve every time you pitch, but as you continue to practice you will figure out what works and what doesn’t.

Also, practice your pitch tailored to the occasion and the audience. Whether it is a demo day or a sit-down meeting, make sure that you have rehearsed your pitch in a similar setting before walking into the room.

Finally, try to pitch… a lot.

Go into every investor meeting with the goal of coming out better prepared for the next. See what sticks, which points are clearly missed, and which questions you should prepare for the next meeting.

Dare to be opportunistic and use meetings as warmups or as a sparring round before you go on to your target investor.

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Ready to nail your investor pitch now? 😎

Pitching to the right audience, hooking them from the start, telling a great story … you know how to do it now. 👊

Let us know if you have any questions left; we’ll be happy to elaborate! Also, don’t forget to tune in next week for Part Nine in our Startup Funding Masterclass: The Ultimate Term Sheet Guide!

Or check out this summary of the Startup Funding Masterclass.

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