What would an entrepreneur be without a business pitch? Someone with an idea, nothing more. In fact, ideas – good, even great ideas – are plentiful, but the presentation of that idea to investors is when it all has a chance of becoming reality. Pitches can happen almost anywhere – on a stage, in an elevator, over a coffee, via a screen or email – and it is usually an entrepreneur’s one and sometimes only chance to spark an investor’s curiosity.
It is a common misconception that pitching is only about presenting ideas and making an ask. In fact, the main purpose of a business pitch (or any pitch really, for example, a movie or book idea) is to get the investor, or whomever’s support is needed, to want to know more, to start asking questions. This is not as easy as it seems. It requires planning, creativity, clarity, confidence, and, of course, skills.
After working with many investors in the past ten years, I have learned that at the end of the day the final decision comes down to one’s gut instincts about the founding entrepreneur. Obviously, reaching the point of whether to invest or not goes through significant business and financial analysis, but very often decisions related to early-stage startups are based on a mix of logic and feeling. In fact, investments in early-stage startups are a lot like taking a shot in the dark. Personally, when I invest in a startup, I do so with the full understanding that I might not ever see that money again. So, if it’s so risky, why do it at all? Well, if I do see that money again, I expect it to be with a significant multiple attached.
When an entrepreneur is making a pitch – no matter how seasoned they are or how many startups they already have under their belt – they are in effect asking the investor to take a leap of faith. And when it comes to persuading someone to take a leap of faith, it’s necessary to go after both their logical mind and their emotional heart.
What I have noticed about startup pitches, especially from first-time entrepreneurs, is that they forget the very basic point that investors are human beings. An investor does not come in one-size-fits-all. Like all of us, they have good days and bad, they have their own lived experiences, and their own opinions as consumers, parents, tourists, amateur chefs, sports fans, activists, etc. All of this has the potential to influence – for better or for worse – an investor’s opinion of a pitch, which is why entrepreneurs must prepare the presentation in a way that calls on an investor’s personal opinions and experiences only at specific times.
This means entrepreneurs must create a balance in their pitch that connects them and their message with both the investor’s rational thoughts and emotions. Essentially, the pitch must, at different points, control where the investor’s logical thoughts go and what their heart feels. This is what I call the Mind-Heart Framework.
The Mind-Heart Framework can be used as a complement to the standard components of any investor pitch and get them interested in an idea and curious enough to want to know more. The following recommendations are for a traditional pitch slide deck, but the concept can be brought into something as short and purely verbal as an elevator pitch.
Slides focused on Problem & Solution: Make the investor feel what you want them to feel.
- Assume that the investor knows nothing about what you are talking about and has nothing in common with your target customers.
- Use storytelling to create a picture of your target customer and guide the investor to feel what you want them to feel. It’s important to note that what you want the investor to feel is not their own emotions but what your customers feel.
- Avoid making blanket generalized statements about the problem you are trying fix because if the investor has never personally felt this pain, they are less likely to believe it is an issue that needs to be addressed (and can make money doing so.)
- When sharing data, make sure the investor is already set up to understand how it relates and impacts the customer rather than how it relates to them personally.
Slides focused on Market: Call on the investor’s expertise and experience.
- When you present the opportunity that comes with your business idea, you want the investor to lean into their past experience, their expertise, and personal investment interests.
- If you shared a specific story to illustrate the problem that your idea addresses, tell the investor just how many stories like that exist. Open their eyes to the size of the market. Graphics are often helpful here in visually displaying the scale of the market and, hopefully, getting the investor a bit caught up in thinking about market potential.
Slides focused on Business Model, Traction, and Go-to-Market: Be confident and gain trust.
- Once you have sparked the curiosity of the investor, it is time for them to believe in you as a competent and confident leader, capable of executing your plan. It is often at this point in a presentation, when emotional opinions begin to form about whomever is pitching. So, the delivery (tone, word choice, body language, eye contact, ego, etc.) is key here because, when done well, it connects with both the investor’s logical mind and emotional heart.
- Transmitting confidence is essential. There is no room in this part of the pitch for a passive delivery. There is no room for doubt. Use assertive, affirmative statements and explanations and avoid expressions like “I think”, “I believe”, “it’s possible”. Do not overinflate but do be bold.
- Respond to questions about obstacles to scalability with an energy and tone that instills confidence, even if you don’t yet have all the answers.
Slides focused on Competition and Your Unique Value Proposition: Straddle hard facts and passionate emotion.
- When describing your potential competitors, do so in a straightforward, fearless manner that demonstrates your industry savvy. Facts are facts. Explain who the competition is and what they are and are not doing well.
- Then, from these facts, in a tone and language full of confident and passionate energy, present your unique value proposition in the face of such competition. This will connect with the investor’s emotional heart.
Slides Focused on Financials, Team, Timeline & Ask: Present the last details to investors.
- Share your financials with the investor with certainty. Believe in your numbers (even though, let’s be honest, it’s unlikely that the investors will believe in them). Demonstrate how the financials align with your strategy as well as the methods behind your calculations.
- The next step is to introduce your team. The investor is, hopefully, already emotionally connected to you as a leader, so appeal to their logical mind with the credentials (just a brief description will do) of your team.
- A timeline will help them envision where this leap of faith could take them (and when). Then, at long last, it’s time for you to make your ask and tell them what you will do with the funds.
Final Slide Focused on Closing: Wrap it all up with feeling.
- The last slide of the deck should appeal to emotion. Share why you are so passionate about this proposal and why it is so important to you personally that you will keep working even when the going gets tough.
This all takes practice, of course. In fact, making a simple pitch to investors is difficult and nerve-wracking enough, but the ability to know when to go after the mind or the heart of an investor is a skill that makes a business pitch even more compelling and ultimately more successful. The goal is to make a logically sound and emotionally-charged convincing pitch that not only lays out a worthy investment opportunity but sparks the investor’s curiosity to meet the team who will persevere through the hardships of entrepreneurship to make that idea a reality.
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