I was once told that if I can’t explain my company and what it does in a sentence or two at most, then I have no idea what the company does. Ever since then I have tried to fit most of my ideas and soon to be start-up into a sentence and that task is not so easy. Maybe it’s not so easy because I always feel the need to explain in complete detail, thinking that will help the other party understand better and want to work with me. But really, most people that matter and could help grow your business rarely have the time to listen to your “detailed explanation”. They will rather hear a succinct description A.K.A. elevator pitch.
The term ‘elevator pitch’ has been coined with respect to the expected duration of the presentation. An elevator ride is usually short (bar power failures) and lasts about 60 seconds averagely. So the challenge here is can you win over a potential investor in 60 seconds? Many entrepreneurs and investors actually believe an elevator pitch could do more than a complete business plan that even includes the financials. I once watched a YouTube video a while back where a VC explained that he received about 100 new business plans every day, each plan averaging 45 pages. He went on to say he barely ever reads a complete plan, that most times the names on the team sheet, their experience and executive summary is enough to decide whether to keep the plan or toss it. He finished by saying over 60% of the deals he decided to fund was because of what he gathered from the first few minutes he spent with the entrepreneurs. First impressions could make or break your dreams!
There are two bits to a winning ‘Elevator Pitch’: Planning and Delivery. Both are completely important and must be treated as such. An elevator pitch is different from when you have to sit down face to face with investors where you have excel sheets to back you up and a number of PowerPoint slides. In this case it’s just you, so you must commit what you need to say to memory; you only have a minute after all.
Planning: This is the point where you sit down and think about what your company is, what problems it solves and then summarize well until it fits into a 50 second time frame. Everyone loves a product that solves problems so make sure you emphasize that when you are planning what to say. Here are a few pointers to help you plan.
- Be concise. They only have so much time to listen to you, so put your best foot forward and tell the other party right of the bat what you do. Research in detail what the problem is and how your product solves it. Have you personally faced the problem yourself? And is that what inspired you to come up with the product? No need for pleasantries beyond “Hi Mr. X, my name is Y and I have this product…”
- Prepare for Questions you could be asked and have a business plan plus financial in hand. The person you are pitching might have a bit more time and want to find out in more detail about a thing or two, so be prepared for questions so you don’t look stupid and get caught off guard. Remember to also have a copy of your complete plan in case he/she asks for it.
- What is unique about your product and what makes it different from others? Make sure to research your competition and have valid points about what makes you better than them. Never say you have no competition, there is always competition. It might not be close competition, but there’s always competition.
- If the product has launched and is doing well, make sure to point this out. Tell the other party that the company is already starting to make its mark but with the large market for it and how well it is being received, you are looking to expand.
- If you have already built a successful start-up in the past, include this in your pitch. It shows that you have experience and know what it takes to succeed in business, making you even more investment-worthy.
Delivery. This bit deals with how you physically pitch the potential investor. Have you ever heard that investors don’t invest in ideas? Well now you’ve heard it, they invest in people. So how you carry yourself and your persona does count for a lot. Here are a few things to remember:
- Be confident. Nothing is more attractive and comforting than confidence. If you don’t look like you are completely sure about your business, why would anybody want to invest their hard earned cash in it?
- Be Personable. This also has to do with the fact that investors invest in people. If they are unable to connect with you, they won’t want to work with you. You don’t have to act like a clown to make the guy laugh but you do have to make the person interested. If you must come up with hooks in your pitch or general discussion, then by all means, please do.
- Leave a calling card. It doesn’t have to be an actual card, it could be your business plan, you setting up a meeting e.t.c. just anything to make sure you will be able to reconnect after that day. It’s one thing to leave a lasting impression and another for them to be able to reach you after you might have successfully won them over.
