1. The art of storytelling
A pitch is at its heart, a story. Forget everything else you have ever been told about fundraising. Your success in raising capital for your idea, or your start-up, will depend on how good a story you can tell. Moreover, how you tell it, is just as important. So, get comfortable with talking about yourself, your beliefs and make sure you have a chronological narrative that investors can understand and be inspired by. Tell it with passion!
Technocrats will not save the world; change will be brought about by the people who have a vision and can communicate it well. So, embrace the poet, the artist, and the storyteller within.
Remember, it is your job to convince the investor.
2. Know your investor
The cardinal rule before every pitch meeting is: GOOGLE. Yes, seriously.
- Find out what investments the investors have made previously.
- Identify their areas of expertise and investment preferences.
- Speak to people who know them or are part of their existing portfolio.
- Establish a personal connection and build a rapport.
I remember the first time my partner and I presented our start-up to a room of potential investors. We made sure to find out the smallest details about them as well as the organisations they represented.
Our homework allowed us to strategise a more effective pitch, tailor-made to the people we were meeting, and it helped build a greater sense of trust because we were able to align our vision with their beliefs.
3. Your elevator pitch needs to be one minute
We do not always meet our potential investors in formal conference rooms; sometimes you may find your next donor or investor during small talk at a cocktail party or waiting to catch the next flight.
You have to be able to use the opportunity wherever it may arise, to make a compelling case for your start-up or investment idea in one minute. Any longer and your investor will lose interest and move on.
4. Your formal PowerPoint presentation is always 15 minutes long
- Fifteen minutes translates to about 12-15 slides.
- You must leave another 15 minutes to answer questions.
- Always be prepared to present your main business points with less time in hand.
5. Remember to listen
Investors will likely put you through a punishing process and ask you questions you have probably answered many times before. Here are some questions that I like to ask:
- How exactly are you planning to scale your current business?
- What are the main growth drivers?
- How are you going to use new resources (money, people, connections) to grow faster?
Experienced investors will also push you to consider changes in your technology platform or business model. View the process as an opportunity to explore potential new ways of thinking about or structuring your business.
Do not scupper the advice, because it is not necessarily in line with your own ideas; there may be merit to some of those suggestions that you can benefit your start-up later on.
6. Exit, stage left.
As a social entrepreneur, you care about changing the world. An impact investor cares about changing the world and making a lot of money in a short to medium time frame (usually three to seven years).
Therefore, a crucial part of your presentation will have to include a mention of an exit strategy for your investor. Do not assume that will mean an IPO in five years and your becoming the CEO of a Fortune 500 company (very, very rare scenario!)
In all likelihood, exit will look like a licensing agreement with a big company, a strategic sale of the business to another larger company or the sale of your investor’s stake to a later-stage investor.
So, make sure you tell your investor when they can monetise their investment. It may be an unstated question in the meeting, but one you have to address, regardless.
7. Male vs. Female
Harvard Business Review recently published a study analysing VC conversations and how differently they talk about female entrepreneurs.
There is a gendered discourse around female entrepreneurs, HBR discovered. Apart from a few exceptions, the investors often assessed women as having qualities fundamentally opposed to those required for entrepreneurship. However, when assessing male entrepreneurs, the opposite was true. Unsurprisingly, these stereotypes played a role in who received funding.
One of the worst pitch sessions I ever experienced was when I was called in to mentor a panel of entrepreneurs and every male investor in the room called the female entrepreneurs out on their levels of commitment. “Do you think you will be able to give up your personal life to make this company grow as it needs to?” was a common question. No male entrepreneur was asked this.
Female entrepreneurs: the cards may feel stacked against you. Nevertheless, there is hope. Conversations such as these are making the gender bias more transparent.
Money needs to be invested in businesses that have the highest potential. Period. When you stand before your investor, at the next pitch meeting, remember that. Believe in yourselves and what you have to offer the world. That is part of the change you are here to create.