You’ve grabbed the attention of potential investors and now have the chance to sell your business idea in person. How do you put together a pitch that’ll knock their socks off? Two of the team from Octopus Ventures - Partner Manager, George Whitehead and Investment Manager, Will Gibbs - know what it takes to start a business from scratch and share their expertise in presenting business ideas to others.
1. How long should your initial pitch be?
Keep it brief. Explain your idea and what you intend to prove in the early months. Most initial pitches last around five minutes, with later meetings to secure commitment and action running closer to 45 minutes. If you have an hour slot, be ready to do a 30-minute presentation and then leave plenty of time for discussion. You need time to answer questions and gather their feedback.
2. What should your pitch cover?
With just five minutes to wow your audience, keep focused by talking about who you are and what your business is trying to achieve. Explain why you’re suited to running this business and who else is involved. Close by talking about how much potential you believe the business has. Cut everything down to the essentials. Investors and backers will say ‘tell me more’, or ‘OK, that’s not for me, but you should speak to this person’. Your pitch is really a sales call, so all messages to sell your product apply to your pitch too.
3. What do most start-ups talk about?
Will surveyed more than 60 of Octopus Ventures’ portfolio companies to identify the top ten categories included in their pitches. All mentioned their team and most their product. Many included the problem, business model, company purpose, market size, solution, competition and financials. Fewer than half explained: “why now?”.
Quality pitches contain a clear message about where the company’s competitive advantage comes from, include a “why” or mission statement, and leave the audience engaged and keen to know more. Be transparent and include the challenges and threats to your business idea too and be prepared to talk about them.
4. Things to leave out of your pitch
Pitches often fall flat because the presenter assumes the audience has a lot of background knowledge. Strip out the complexity and jargon and include enough information for your audience to understand the significance of your plans. Be mindful of the language you use to ‘sell’ your business or idea. During an unhealthy number of pitches, the business owner is claiming that any and every market is ‘broken’.
5. Make market data count
Don’t throw broad industry numbers into the presentation. Focus instead on the total addressable market. You can’t predict the future, of course, but a considered approach to your calculations will show potential investors that your team is capable and focused.
6. What supporting data should you bring?
Trying to squeeze everything into your first meeting with a potential investor isn’t going to lead to a quality pitch. But be prepared for the conversation afterwards. A PowerPoint pitch should communicate, very simply, what your business does, what your market is, who you’re selling to, how you’re selling, what the team is, what the plans are for the future, what’s the long-term ambition, etc. Eventually someone will ask you for a business plan and follow up with a bunch more questions. Appendix slides are useful so you’re ready for every possible direction. Being prepared to talk numbers is simply good salesmanship.
7. Learn about the panel you’re pitching to
Don’t forget to do your homework on your audience. In the best pitches, presenters reference common connections they have with the panel. They put the effort in to build a bond and show they’ve done their research from the start. Search LinkedIn, company profiles and trawl Google to understand their expertise. This might be your first meeting with someone who’ll be sitting on your board for the next eight or ten years and could be the beginning of an important relationship.
8. Practise makes perfect
The more you practise your pitch, the more polished you’ll be. But what will really pay off is time spent preparing for a robust discussion afterwards. Investors want to see you’re in control and can make the business a success. Be careful who you choose as your test audience though. Friends can be bad at supplying feedback; they’re all too supportive and nice. Find the most commercially-minded people you can and pitch with the understanding you want really constructive feedback to make it better”.
The Octopus approach to getting feedback – asking for three positive things and then three developmental things – can be helpful. Once your practise audience has said nice things about you, they’ll probably have the confidence to talk through some of the less positive ones too.
9. Use stories to draw your audience in
The most persuasive pitches are those that include stories. Whether it’s talking about how you came up with the idea for the business, the vision or purpose of the business, or validation from your early customers, stories can really help to bring your business to life. If you can, include mock-ups and screenshots of your product too. Even if you don’t have many customers yet, if the people you have sold to are enthusiastic, that starts to tell a story you are building something exciting”.
10. You’re a big part of the offer
You are under just as much, if not more, scrutiny. Investors want to know you’ll be able to handle the pressure and challenges of start-up life. Do you have the energy and the passion to convince future customers, suppliers and employees to stay the course? You can’t say ‘there’s a real opportunity here’ without getting excited by it and need to convince people to take on the risks, especially in the venture space. Investors look for entrepreneurs who are energised and articulate about their vision.
11. Spend time listening to others’ pitches
If you haven’t pitched before, or you’re looking to sharpen up your delivery, you can find plenty of inspiration online. You can even pick up some tips from watching episodes of Dragons’ Den. One of the good things about Dragons’ Den is you can tell a bad pitch instantly, and it is pretty obvious when they’re pitching well. See what works and what doesn’t and use it to shape your presentation.
The opinions expressed by third parties are their own are not necessarily shared by St. James’s Place Wealth Management.
This article has been provided courtesy of Octopus Ventures.