Looking to pitch your startup in front of potential investors? The "trick" is to follow this 3-step system.
As exec. who worked closely with over 50 entrepreneurs and startup founders that collectively raised over $150M, and after attending dozens of investor meetings, I have some strong views on how to approach investors, what information they want to see, and how to present your startup story in a compelling way.
This is the approach that helped successful founders raised their Seed, A and B rounds fairly fast with less guesswork and mistakes.
Step #1. Map out your potential investors
Here are some guidelines that will help you save time and effort when looking for the right investors for your startup.
1. The Right Investors - look for active investors that have made recent investments in your industry. Don't chase healthcare investors if you are in the fintech industry. It won't make any sense. A good source for that is Crunchbase.com and local media outlet that covers startup funding rounds.
2. The Right Investment Size - once you build a list of potential investors in your industry, you need to make sure that they invest in the stage that you are in at the moment (just getting started/pre-seed, seed, series A, Series B...). The investment size for each stage differ and you want to approach investor that fits your stage. You can read about it on the investor's website under-investment criteria.
3. Once you compile the final list, it's time for you to approach them, either via email, Linkedin, or a connection that knows them in person (the best). You have one chance to do it right and get their undivided attention. Here is a message template that you can use when asking for a Connection request on Linkedin:
Hi [Investor name],
My name is Oran and I'm the founder of The Startup Hub, a place where busy founders get an edge through tools, training and resources so they can grow their startup fast with less guesswork and mistakes. My clients have included the founders of startups like ICQ, Meteo-Logic, Fireblade, Unomy just to name a few.
Your VC firm came up in my research, and since you are a partner there, I’m requesting a connection to see if you might be interested to chat and get more details about our company.
Are you available next Tuesday at 11:00 AM EST or Wednesday at 4:00 PM EST for a 30-minute intro call?
Make sure to put a link to your website.
If you don't get a response within 2-3 days, make sure to follow-up, be nice and not rude, and keep asking for a meeting. It can take some time before you get an answer, so don't give up until you get a response.
Important note: you need to set your expectations right from the get-go. The first email is potentially the beginning of a long relationship with the investor. It doesn't mean that you'll get the check a week after you sent him the first email. From my experience, it takes weeks, months, sometimes years to get an investment from cold emails. So you need to set your expectations and understand that this process takes time (don't give up, ever).
Step #2. Work on your one liner
Sometimes all you have is one minute, one moment in time to grab the attention of a potential investor and get your ticket for the following meeting.
How do you do that?
You work on your one-liner, you perfect it, and then you memorize it, every day.
How to create a compelling one-liner?
Here are 2 templates you can use, just fill in the blanks.
I/We help _________ to _________ by/via/through_____________
Example 1: I help founders to grow their startup via professional tools and services
Example 2: We help busy moms to get fit through short and intense workouts
the same as option one, but this time we add also the benefit
Example 1: I help founders to grow their startup via professional tools and services to avoid costly mistakes and guesswork
Example 2: We help busy moms to get fit through short and intense workouts they can use to stay attractive and healthy
Step #3. Prepare a compelling pitch deck
Now that you have your winning one-liner, what else you should include in your pitch deck?
First, here are 6 tips you should pay attention to when building your pitch deck:
1. The deck shouldn't be too long, it's not about quantity but quality. There is a reason why the famous TED talks are limited to 18 minutes. The attention span of the human mind is decreasing over time, that is why you need to make sure to open with a high drama (like all good movies) and keep your message short and to the point
2. Don't overload it with text, keep it clean and readable from a distance. The slide was built to only summaries points, and you, the presenter, should elaborate more and give the context
3. Add graphs and images to emphasize your facts/claims
4. If applicable add stories and case studies of clients (problem & solution), it will keep the listeners more engaged and focused
5. If you want to get an investment, embrace a mindset of investor (ROI) not a business owner
6. Make sure your financials explains the amount you would like to raise (if your total EBITDA over the next 3 years is negative $2M and you ask for $5M, it doesn't make any sense)
What to include in your pitch deck:
1. One liner
2. The Team (founding team, education, skills, track record)
3. The Market (the problem/need, market size)
4. The Product (the solution)
5. Competitors (map of all leading products on the market on x/y axis, product capabilities comparison)
6. Equity (The amount you would like to raise and the pre-money valuation, previous funding rounds and investors, use of proceeds)
7. Financials (summary of 3Y/5Y Budget Plan, name the leading customers and respective income)
8. Marketing strategy (how you are going to scale)
1. be ready for a question about your exit strategy
2. if the investor is asking about a specific subject, even if it stopped you from going over the presentation in full, take the time to answer and give him/her as much details as possible (don't attempt to end the presentation at once).
Examples of successful pitch decks:
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