Pitching is a very necessary part of scaling your startup, it is an opportunity to share your passion and talk about your business with investors.
Investors see a few hundred to a few thousand deals a year. Bigger ticket funds tend to make less investments (3-5 deals a year), while smaller cheque funds tend to do more (10-20 deals a year). That means there is fierce competition for funding, especially in regions like Sub-Saharan Africa where there are more great ideals than accessible capital.
Many entrepreneurs come up with great ideas but there is a huge difference in having an idea and being able to implement it. This is where seeking for fund comes in, and without a good pitch that idea might just disappear into thin air.
Here are 6 tips that will help you with a successful investor pitch.
Sum it up & quickly: Be concise, but be thorough. and when it comes to your deck and your explanations, less is almost always more.
Know your target customers: You need to know who your customers are and be very specific when describing them. Show investors a picture of a customer along with relevant data points, using demographic and psychographic features to pinpoint your customers.
Explain why your target customers will pay for your product/service: After showing investors that you know who your customers are and where they are, the next thing is to explain exactly how you intend to acquire these customers, this will show investors that you know what you are looking for and how to get them. The success of a business comes down to the marketing, Contrary to the familiar saying, good products don’t sell themselves. You sell them.
Know your competition and differentiate yourself: If you want to convince investors, you need to let them see that you know your business well, and have realistic view over the strength and weaknesses of your product. Also, show that you know your competition as well as their businesses, product and strategies. A quick statement like “we’re the only company who does abc” or “companies recognize we are uniquely positioned to help them accomplish x” creates separation between you and other companies out there who may be claiming similar capabilities. Learn how to define your unique value and make it central to your pitching. Differentiate yourself with your elevator pitch.
Share what any funds you are asking for will be spent on: As an Entrepreneur looking for investor funding, you need to always remember that all money comes with strings. Investor money isn’t free o—they want it back, and 10x+ more once you’re successful. Also investors are interested in helping you scale the business, that means they want to see that your product is working. When pitching your startup, make your priorities clear, simplify your list to no more than three items or categories, with a percent allocation to each, make sure allocation amounts are reasonable, tie use of funds to real traction milestones, and show when you’ll start making money / become profitable. Most importantly, that you’re targeting a billion dollar market and can reach venture capital scale.
Test your pitch: This last step will help you get familiar with pitching, always put into consideration the 10/20/30 rule. The optimal number of slides is 10, you should be able to give your whole talk in less than 20 minutes (even if you have an hour), and the ideal font size is 30 points. Pitching is an acquired skill, not an innate talent, It takes practice.
For more details that will help you in knowing what a VC wants, check out 4 Things a VC wants to see before Investing in your startup.
It is always challenging at any stage to raise money for your startup, even for experienced founders with significant traction in their company, it requires a great pitch. Here is a template that will help you with tips and also help you create a compelling pitch.
Download: Investor Pitch Deck Template
Ingressive Capital is investing in startups all over the Sub-Saharan Africa. Check out IngressiveCapital and, if you need help pitching your business, join the EDG Africa community to get a free personalized action plan pointing you to resources who provide pitch consulting, mentorship and advice.