The difference between an idea and the next Billion Dollar Idea has to do with a lot of things but the first aspect of it is always pitching. Pitching is basically telling your story on why the work you are doing matters and capturing the attention of the onlooker or your audience, to convince them to do something for you or your idea. You often pitch, either for fundraising or winning a competition or to your customers or it would be just recruiting. However, there are several small details, which can help you refine your pitch, be it 90 second elevator pitch or a full blown 10 minute pitch.
Why I am qualified to write this article?
I have worked on various startups as a CEO in the past. For my last entrepreneurial venture, I built a product which was featured on 90% of News Publications worldwide like Business Insider, Washington Post, Hacker News, Fortune, Wired Magazine etc — https://projectfib.azurewebsites.net/
I pitched at various startup events like Techcrunch Disrupt and to Accelerators like 500 Startups. I have won over 10 Hackathons in the past including HackPrinceton, World’s Biggest AR/VR Hackathon at MIT Media Lab etc — more details here — WWW.nabanitade.com
Currently I am leading an initiative called “Build with Me” where I bring together Software Engineers, Designers, Product Managers, Hardware devs etc to formulate the entire product development cycle, right from idea formulation, agile process to pitching. In our first session, we discussed about Pitching and Fundraising and I am making the resources public for people across the globe to read. More details — https://www.facebook.com/groups/175724663684528/
Without further ado, lets dive into the fundamentals of Fundraising and Pitching.
Research your Audience, ahead in time
Have you ever sat through a lecture and couldn’t relate to anything and thought it was the most boring thing in the Universe? Now think about your favorite talk and think about why was it your favorite? Think of how much of it could you relate on a personal level!
Its very important to research your audience, ahead in time, to see what parts of your pitch can they most relate to, what are their motivations to attend your pitch, since time is money and what has worked for them in the past. If you are looking at Venture Capitalists or Investors, look at pitch decks, they have said yes to and what format stood out to them. Are they more technical or business oriented, do they have technology or business background? Trust me, if you give the most beautiful technical pitch, to a Business guy, you will not raise any funding.
Put yourself in their shoes. Will you invest or buy your product, if you were the audience? What tweaks would you want for the pitch to stick to you? If its a specific Business, you are pitching to, think about how your service or product will aid their mission statement or bring in Business value to their org or solve a problem, they are facing and how much of the revenue will they save, by going for your service, in terms of development and hiring costs. Thats your market valuation. Same goes for Consumer Focus.
Trick your audience to convert a 90 second pitch to a 5 minute pitch
There will never be enough time to talk about your idea. But your pitch has to be concise. However, you also dont want to miss out on the important details, which sets you apart. How do you encompass everything? Usually in 90 second pitches, make sure you drop in the keywords, you would like to be asked questions on. However, donot get into the details in your 90 second pitch. Those important keywords would catch the attention of your audience. They would ask you more about it in your Q&A. Then go ahead and describe them while they do.
The details which should be mentioned in a higher level, in your 90 sec pitch are the technical implementations and details on if its a freemium model.
Know your Unique Selling Point
No matter how good you are at pitching, eventually what it would come down to is what does your product bring to the table? Are you disrupting an existing market or creating a new niche? Are you making a new product or improving something or bringing an old existing Business model to a different domain or different geographic region? Do SWOT (Strengths Weakness Opportunity Threats) analysis and market survey to define what market you are tapping into and what gives your product, the edge?
Tell a Story
Customer Character sketches or a story with a pitch is generally the most moving. I will give you an example for 2 pitches —
- “Hi this is XYZ, we are building the next million dollar company and making the world a better place. We are building solutions to create a new shower cap for the ladies to not get their hair wet.”.
- “I have grown up with frizzy hair as an African American woman. Its usually really painful to wash them in the morning. So I came up with this amazing Shower Cap million dollar idea which will change the way we girls interact with our hair. Our company is revolutionizing solutions to push the boundaries … “
Which pitch stands out to you more after you have heard a bunch of pitches by the end of the day? Always integrate a story. It helps people bond with your vision and see your motivations to create a change. If you can somehow tie perspectives to how your idea is solving an aspect of your or someone you know’s life, people are more likely to vouch for it.
Focus of Why, What, How!
As the name suggests, its really simple. Focus your pitch on why you are building, the problem statement, what you are building — the solution and how you are building it. These are the bone structure of a classic 90 sec elevator pitch.
The whole world isn’t your customer
Please narrow down to who is your customer, the customer segment and do some research in form of surveys, A/B tests or gorilla marketing, to identify a specific segment of customer, who would benefit from your product. Make sure, to touch base on this, while you pitch. Saying everybody is your customer, is the biggest red flag of pitching, it shows you haven’t taken the time to research or narrow it again.
Ask for the Money and work on Financials
If you are pitching to get funded, you have to know your valuation and ask for money. You have to mention if your Business Plan is B2B (Business to Business) or B2C (Business to Customer). Think about if someone will pay for a service and how much is the right price to be paid, for you to be able to break even, given your development, logistic and recruitment costs. Remember at the end of the day, the investors aren’t looking to lose money.
Don’t give up equity if you don’t need to
You dont need to raise money if you can bootstrap it by yourself. Remember, fundraising means you are giving up equity in your company for X valuation that the Investor or VC is providing. Remember that maybe right now, your company isn’t worth much but in the future, It can be worth.
This is given, without saying. Pitching is an art of public speaking. A lot of people get nervous. Instead of thinking of the end goal, think of it as an experience where you get to share, what you worked on, your visions, why you think your idea is worth it. Remember, there are plenty of VCs (fish) in the sea, if you didnt get funded at this point.
Focus on building a world class team
If you have been in the startup world for a while, you would know that founders and investors, would put the bets on a team, as compared to the idea since Startup ideas may pivot multiple times but what bring it to fruition is a world class team. Make sure you are able to showcase that and have defined roles of who does what, before you go pitch.
Stage of Funding
Often You would be asked what stage of funding, you are on. If at all, you are fundraising or have fundraised, you would fall within these bandwidths of Funding and certain Investors fund startups specific to these funding bandwidths. It could be Pre-Seed, seed, Series A, B, C, D — Learn more here — https://www.investopedia.com/articles/personal-finance/102015/series-b-c-funding-what-it-all-means-and-how-it-works.asp
If you don’t go for funding, its typically called that your startup is “Bootstrapped”.
Talk about Numbers
When pitching, talk about either valuation of the Industry or the number of customers who have signed up for your product or the funding you have raised. That shows that the Startup is seriously pursuing the idea. Numbers are the biggest advocate for your pitch.
Practice, Practice, Practice
Practice as many times, as needed to get the pitch down to 90 seconds. Time it. Make sure, you are speaking in a comfortable pace and not rushing through it because generally when people tend to get nervous, they would rush through things and grasping so many words at the same time, can be extremely hard for someone.
Network — No is not never
Sometimes, you might be turned down by a VC or Angel Investor, at that point in time but no is not never. Make sure, you network and keep in touch and keep them updated on what you have been building. A sustained relationship will take you places, when you least expect it.
Offer, how it helps others vs how it helps you
Always move the conversation, towards how the Investor or VC listening to you would benefit from this deal or investment and less about what they can do for you. They are more likely to listen if they immediately see a benefit out of it.
Have a solid 3 year plan, lead with your MVP
If your plan is to break even or have a successful exit or have a billion dollar company, make sure you have a plan in place worked out, when you are seriously fundraising. Having financials and a solid Business Plan ready and possibly the company registered, would help making fundraising much more easier. Always try to have a Minimal Viable product ready to showcase a proof of concept which conveys the idea in an excellent way. Add fancy features later.