At SeedInvest, entrepreneurs constantly pitch us their latest business ideas and plans. These pitches come in the form of emails, executive summaries, PowerPoint presentations, videos, tweets, and sometimes 30-second elevator speeches in between or leaving events.
As a founder, having an effective pitch is the gateway to a sit-down meeting with an angel investor or venture capitalist. After seeing thousands of pitches, here are the five best practices I recommend for reaching out to a new potential investor:
1. Rehearse your pitch
When approaching investors, you often only have a short timeframe to pitch your company and make a positive, lasting impression. In order to do this successfully, you need to understand your business, the market opportunity, and the competitive landscape inside and out. Then, you must be able to distill all that knowledge into a punchy one-liner. Having a polished pitch will demonstrate your competency as an entrepreneur and allow you to focus on starting a meaningful conversation with investors.
2. Pay attention to details
If an investor is interested in your company and starts asking detailed questions about your business, you should be prepared to answer them with confidence. Questions such as “How many people are on your team?” or “What is your previous fundraising history?” or “What was last year’s revenue?” should be easy lay-up questions.
If you can’t answer basic questions regarding how your business is set up and run, an investor will lose confidence in you as a leader. This is a problem given that the team is a major factor that an investor looks at when evaluating a deal. Sloppy mistakes in a pitch deck, errors in a financial model, or grammatical errors in an email are indicative of carelessness—these will lower your chances of an investor wanting to entrust you with their capital.
Knowing key details about your company and taking care to present that information in a polished manner will give you an easy win when pitching your company to investors. This alone may not be enough to sell an investor on your company, but it is an essential element.
3. Understand your audience
Before pitching, it’s important to have done a fair amount of research on the investors you will be approaching and, if applicable, their associated funds. This will allow you to understand what each investor is looking for in a startup, so you can tailor your pitch accordingly.
By researching potential investors before you pitch your company, you will gain insight into how each investor could uniquely add value and identify which investors may be particularly suited to your startup. This will also ensure that you are pitching to an appropriate audience. It’s a waste of everybody’s time if you are pitching a seed-stage startup to a growth equity fund, or a software development company to an investor who exclusively invests in hardware.
4. Have a call to action
A lot of founders have a great pitch. But without a call to action, even the best pitch has no purpose. If your pitch impresses an investor, they may want to get involved with your company. However, it falls upon you to let that investor know exactly what those next steps are.
Are you actively fundraising with a timeline? Are you looking for intros to other strategic investors or advisers? By having a strong call to action, you will let investors know how they can best help you.
5. Follow up, but don’t be pushy
Early-stage investors are constantly bombarded by business plans, flooded by requests for meetings, and frequently traveling on the road. If you are working your way onto their calendar or if you already had a good initial meeting, don’t be afraid to reach out and follow up.
Between vetting applicants on SeedInvest, attending demo days, and meeting entrepreneurs, I don’t always have time to follow up with every promising startup I meet. Being polite and persistent can pay dividends, especially if an investor wanted to connect, but lost track of you because of a busy schedule.
However, there’s a fine line between being persistent and being pushy. If you’ve reached out several times and are still getting the silent treatment, then take the hint and move onto the next investor.
Whether you’re looking for strategic partnerships, advisers, or funding for your next round, the first hurdle you must overcome when approaching an individual is your startup’s pitch. By following these suggestions, you will be better prepared to deliver a successful pitch that will open doors, make connections, and secure funding for your startup.
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