How to create a winning pitch!
I've recently graduated with a master's in Entrepreneurship, so what better thing to do than share some knowledge on how startups create winning pitches.
The new financial year is just around the corner, so it is a perfect time to find last-minute investment opportunities. Here we investigate how startups create winning pitches.
What is a pitch?
A pitch is a presentation of your business idea to potential investors (pitches are also used to pitch a product to a buyer). The goal of a pitch is to instil enough confidence in the investor that they will give you their money in exchange for a return on investment (ROI).
There are mainly two different types of pitches. One is the traditional presentation, in which you stand in front of a group of people and present a PowerPoint presentation or slide deck.
The other type is the infamous elevator pitch. An elevator pitch is a brief statement giving an overview of the company and its target audience. It is usually an introduction to the company before the pitch is made. The idea is that you could present your business to someone in an elevator, and you’d have to deliver your pitch before they got off.
Why do you need a pitch for your start-up?
A pitch is not 100% necessary. You can self finance the business by putting your own money into the company. However, if you have a particularly insatiable appetite for rapid growth and business development, then the investment route is a great option for this. Therefore, a pitch deck is a highly recommended tool in your startup business arsenal.
Tips to create a winning pitch
Choose the right slides for your pitch
Guy Kawasaki states that slide decks need to follow the 10/20/30 rule. 10 slides, 20-minute length for the pitch, 30-point font for each slide.
When thinking about the flow of your pitch, you may want to move the slides around. Pitching is much like auditioning for an acting role; you will most likely get more ‘nos’ than ‘yeses’. Use the feedback from each pitch to tweak your current slide deck into something better with each iteration.
When thinking about the content for each slide, there is a great resource you can read here. We have highlighted our thoughts on a couple of the slides below.
For the 10 slides we recommend;
- The Problem,
- Your Solution,
- Target Market & Opportunity,
- Revenue Model,
- Traction and Validation,
- Marketing Strategy,
- Investment Ask.
Pitch deck: Team slide
To give confidence to a potential investor the team slide is crucial for this. They will need to know exactly who the people asking for money are.
You should start by highlighting the key team members, what expertise they provide the business, and what experience they have had in the industry or similar fields. The more solid the team is, the better your chances to create a winning pitch.
Pitch deck: Competition slide
Another equally important slide is to highlight your main competitors. Remember to do your diligence when designing this slide, as investors will be looking for what the space offers currently. Also, everyone cops out and says that a competitor is Google. Instead, look into the market and identify key competitors.
Why are they, competitors? How advanced are they? Why is your solution different?
More tips – how to create a winning pitch
What we are going to focus on for the rest of these tips are the helpful bits of advice that you usually do not come across. Such as…
Avoid cognitive bias
Cognitive bias is a term used to describe the way the human brain processes information. It is a mental shortcut that we all use to make decisions. It is important to understand cognitive bias as it is a systemic error in the way we all think.
One of the most common mistakes that startup founders make when they are pitching to investors is that they try to convince them with their idea, without first understanding their own cognitive bias. There is a good chance that the business idea is something that the founder needs (which is subjective), and not something that the market needs (which is more objective). Ultimately, if the market does not need the product the business will most likely fail.
How to avoid cognitive bias
A good solution is to do your market research as part of a discovery campaign within your business. Some product development companies offer discovery as a part of the product development process. For example, we have a team dedicated to this process led by our Discovery and User Experience (UX) specialist.
Make your pitch clear
You should be able to clearly tell the story of your idea. This is where practice comes into play. You need to be able to practice your pitch over and over again until you are able to deliver it in front of a group of people and not have any hiccups. You should also know your figures when answering relevant questions. For example, you should be able to roughly estimate the value of your business when asked. This is something that is much easier said than done.
Anticipate your audience’s questions
When you are preparing to make your pitch, you should think about the questions that the investor is going to ask. By having this preparation it means that you will not be caught off guard during a pitch, struggling to think of an answer.
To really wow the audience, you can create a wire framework for your product. A wire framework is a rough approximation of what your final product or service will look like. For example, in the case of a web app, a framework could show what the user’s journey will look like as they use the product.
It does not have to be very polished as long as it is a good representation of the final product. If you are working with digital product agencies, often they will produce a wire framework for you to approve. You may be able to use that same wire framework in your presentation.