How to fabricate a successful business pitch? What are investors looking for in start-ups? We share our experience which we here at Exagent Group gathered over the years – an article by Orsolya Jakots, brand manager
As a start-up, it can be challenging to thoroughly introduce your business to investors. In some cases, there are only 10 minutes to show your company’s worth and convince investors. The objective is to put your main idea in the center and arrange related subtopics around that core idea. Therefore, you can help your investor to understand your goal more accurately.
Based on our taste and experience we created a step-by-step guide to give a helping hand to young, investment seeking start-up companies. Here are some tips on how to shape your pitch to make it more successful – writes Exagent Group‘s brand manager, Orsolya Jakots.
It is beneficial to begin your presentation with a compelling story. You should align your story with the problem that you want to solve in the marketplace. It is even better if your story is relevant for your investor. In order to get to know your audience, you can do research previously in your investor’s history. As an example, what industries they support to invest in, which startups they have already invested in? With this research, you can have a sense of what they care about and tailor your pitch deck story to them.
Afterwards, state the problem that your future clients are facing and describe how you can solve them.
There are so many products and services thrown on the market, you need to stand out with your solution and explain how you can fill in those gaps that your clients are “suffering from”.
You must complete a thorough research and understand the market where your product or service can be satisfying and booming. If you fail to find that specific gap in the market that you are fabricating your company’s products for, that can lead to a misalignment on those audiences’ needs. In worse cases it can waste time and resources or alienate an audience.
Therefore, it is suggested to have a breakdown of your company’s TAM (Total Available Market), SAM (Servicable Available Market) and SOM (Share Of Market). Using these data and formulas can help to determine actual numbers of your market analysis and understand your target market better.
It is one of the most essential slides that investors give attention to. How will you make money? What is your revenue model? Is it Advertising, Freemium, Licensing, Markup, Production or perhaps Subscription Model? Try to scout between the options and determine which revenue model could be more fitting to your business.
In this section, you show your investors what your business would look like in action.
How will you reach customers? How much would that cost? What is your sales cycle strategy? Entrepreneurs tend to give less credits for this part, however it is also an important detail that interests investors. You should calculate your customer acquisition costs (CAC) to determine how much money your company spends to get new customers. It is good to mention communication channel options, advertising platforms that you use to reach potential customers.
First and most importantly, who are your competitors? Secondly, why are you so different from those competitors?
One of the great options to showcase it, is a Competitive Matrix Format. List your competitors down on the left side of the figure and add features and benefits on the top. Then place check marks on each lane under each category where it is applicable – do they have that feature/extra? In order to show your competitive advantage, it is a good point if your company has all the checkmarks and is better in most features than your competitors.
State how much money has already been invested in your business. Who invested in it? What are the ownership percentages? State clearly as well how much more money you will need to step up your game and define transparently what that would be.
Demonstrate the projections in revenue over the next three to five years. It is vital to back up all your information with not only assumptions but facts and numbers as well.
If investors would like to hear and know more, be well prepared and add extra information slides at the end of your pitch deck.
Adding a Vision slide can really add value to your pitch and bring an even greater first impression to the investors. What is your company’s long-term vision and plan? What would you like to construct and build up on the long run? By clarifying these perspectives in front of your investors, your conversion of receiving a successful investment might be better and make a deeper impression in your audience.
Julia Sohajda, co-founder of Vespucci Partners Venture Capital Fund, who has just been selected by Forbes for the 30u30 list, confirmed to our question that outlining the vision will allow the investor to see the great opportunities and potential of the business. The investors can really “fall in love” with this approach.
There is always a possibility to improve. Listen to the feedback you receive, whether it is positive or negative and refine your pitch deck or business model. There is a chance you will schedule a next meeting or receive funding or even be rejected. Any of these outcomes give you a new perspective and an opportunity to improve. It can be reflective to hold a session with your team afterwards. It is a great learning experience that you can implement to your professional life in the future.
Author: Orsolya Jakots Brand Manager, Exagent Group