Whether you have been in business for a few years and you need financing for growth, or you're a new start up, finding the money you need can be tricky. Taking the time to craft a well-researched and passionate pitch is definitely worth it. Great entrepreneurs invest time and heart into their pitches. Below we highlight 3 experts' advice:
What Your VC Pitch Should Look Like:
David S. Rose has raised millions pitching to VCs and is now a VC himself investing in entrepreneurs and their small businesses. In this TED Talk, he shares 10 qualities an entrepreneur needs to exhibit within their 15-30 minute pitch:
How do VCs know you're a person of integrity after spending only a few minutes with you? Your story should include elements of your past where you have followed through and stick to your word.
You've got to be passionate about your idea. If you're not passionate, why should the VCs be passionate?
Prove that you've done this before. Show them how you have previously started an enterprise, created value, and have been part of building a business from start to finish. Even if your previous ventures weren't "successful," show them that you have experience and that you learned priceless lessons along the way.
Make sure that you actually know something about your domain. You need to show that you understand the product, service and market that you're diving into.
Show them that you have the skill to get a company going. They need to see that you understand all aspects of building a business: sales, marketing, technology, etc.
Talk about how you've built a successful team in the past, and prove that you have the charisma to inspire people to join your team and accomplish your vision.
You need to convey to the VCs that you're determined to keep their money alive--even when bad things happen. You're in this for the long-haul.
VCs don't want to see another "me too" product. Prove that your idea is unique and innovative.
On the other hand, you also want them to see how realistic you are. You know that bad things can happen before you actually change the world with your new product or service.
VCs have a lot of experience and have seen many businesses come and go. Let them know that you are open to learning from them and that you are coachable.
Get to Know the VCs
You're going to have a better chance at landing funding if you can network your way into a VC's office. If you can get a colleague to vouch for you, your foot is that much further in the door. Start asking around your network for VC recommendations--a VC who has invested in similar products or services.
Once you have a meeting setup with a VC, find out as much as you can about her and her company. Lori Hoberman wrote an article for Entrepreneur.com about how to get your foot in the door with investors: it's all about a great executive summary. Here's what she strongly suggests you include in your summary when contacting investors:
- What your company does.
- What industry problems your company solves.
- How your company solves that problem.
- What is the market for that solution.
- How you will reach that market to make money.
Common Mistakes When Pitching to Investors
Forbes.com lists the 8 most common mistakes entrepreneurs make when they pitch to investors:
- The elevator pitch is longer than 1 minute.
- The PowerPoint presentation is too long.
- Not having a factually supported, well-written executive summary.
- Overlooking a realistic exit strategy for investors.
- Asking for a non-disclosure agreement.
- Submitting investment proposals "over the transom."
- Discussing valuation too early on in the negotiations.
- Failure to listen.