The right way of Pitching your Startup to Angel Investors

Most budding entrepreneurs have ideas which may have huge potential. However, the journey from their “Eureka!” moment to actual execution demands persistent efforts and funding. Entrepreneurs who fail to raise adequate money are arguably unable to continue progressing. To raise funds, entrepreneurs must pitch to potential investors and convince them for their support.

The pitch, though sounding simple can essentially be the make or break the deal for any startup. Here is a list of some important aspects to keep in mind while laying the groundwork for your pitch and how you can deliver a convincing one.

It is important to remember that every person has a limited attention span. If your presentation does not keep your investors engaged, you will most likely fail to convince them by the end of it. Even the most data-savvy investors will lose interest in your pitch if you blatantly present all your numbers.

You can choose to incorporate some creative elements in your pitch, such as presenting in the form of a story, which is a proven way to keep people interested. What is difficult and dull to convey via spreadsheets and financial statements can easily be expressed in the form of a story.

Entrepreneurs have a false perception that they should have fancy pitch decks and use extensive business jargon to get their point across to the investors. The truth, however, is that it is beneficial to keep your pitch concise and straightforward.

The focus should be on showcasing the value that your business has rather than complicating the entire presentation for yourself and the investors. Simplicity can sell just as well, if not better, so try to make your presentation attractive by keeping it focused and easy to comprehend. 

When an investor is evaluating a pitch, one of the most critical considerations is if tasks have been completed on time. Signs of laziness or insincerity can become a setback for your startup. 

While pitching, you must show that you have a proven track record of achieving your targets well on time so that they are confident that you will continue to do so in the future as well. They must also be convinced that the timelines that you set for your future goals are realistic and fitting. 

Even if you are new to the market, you must open up about your traction and sales along with the time you took to get there. The investors also expect details on other relevant financial metrics that can help them evaluate your progress. 

You must clearly state how you wish to grow your startup and the potential streams from which you can extract revenue. It is also crucial to incorporate details about your existing cost structure and how you plan to manage it in the future.

The way you present yourself is as important as the way you present your business. It is all the more relevant if it is the first time you are meeting your investors. 

Although they are looking to put their money into your business, they are also investing in you as the entrepreneur, who is the driving force behind the company.

If your body language and interpersonal skills prove your ambitiousness and reliability, they will be more open to the idea of giving you the funds. No investor will want to work with an entrepreneur who is arrogant or feedback averse.

Before you pitch to your investors, you must have a decent knowledge about them, their sectors of interest, range of investment, sweet spot and timelines to fulfil a typical deal. Your research should also give you a fair idea about their areas of expertise and founder friendliness.

Additionally, you must also look at their portfolio- the companies that they chose and how much they invested in them. This is useful in understanding what you can expect of them and will help you rule out the possibility of a conflict of interest with any of their existing portfolio companies.

If you can find investors with the same vision as yours, you may have a better chance of convincing them about your startup. 

Although you are trying to convince the investors about your product, you cannot ignore the work of your competitors. While pitching, you must be truthful about others in your field and must not undermine or underestimate their efforts.

You should enumerate how you feel your startup is superior to them and how you look to capture the market and potential customers. 

The investor will always respect accurate information, and what matters more, in this case, is your game plan to overtake your opponents rather than anything else.

You must be able to give a concise yet solid description of your product and the pain points it is addressing. However, be mindful of not going overboard while describing your product because the investors are equally concerned about its viability and sustainability, and not just what it does.

 The focus should be on specifying those things that make your startup unique and why it will be attractive to the end users, which is essentially your value proposition. Investors are intrigued by new and feasible elements.

It is integral to understand that the investor will give you his hard-earned money only if he genuinely foresees a success story. Therefore, to show the potential your startup has, you must inform your investors about the market opportunity and your target audience. 

You can also share the feedback you have received from your customers and how receptive they have been to your product. The backbone of any company will always be its satisfied customers so you should look to discuss your customer journey. 

Consider including important metrics such as customer acquisition cost, life time value and the road to profitability.

At the end of the day, both the company and investors want to make money. Another crucial element of your pitch is to show the investors that they will get good returns on their investment and that too in a decent period of time.

Some entrepreneurs make the mistake of disregarding this aspect and only talking highly about their product. They refuse to see the potential exit options that are incredibly relevant for the investors. Whether its IPO, acquisition or next round of funding, you must throw light on this aspect in your pitch.

For most startups founders, pitching in front of investors may be a nerve-wracking proposition, but it is crucial to have faith in your product. Remember to practice your pitch as many times as you can and have answers ready for any questions you foresee.

Most importantly, after your pitch, you should look to follow up consistently with the investors. Irrespective of their response, keep them updated regarding recent developments on your end and foster a good relationship with them.