Lights, Camera…PITCH!
Although pitching your project to investors isn’t as daunting as a Presidential candidate going live on television, in front of the world for a Presidential Debate, it still can be nerve wrecking. Investors can and will press you hard on story, vision, metrics, financials, strategy and many other project details. Fail to back your plan or pitch with hard, data backed proof and strategies (not plans,) you can surely bet that most savvy investors, no matter how unique and game changing you believe your idea is, will not invest in your project or company (or get you elected as the next President of the United States.)
To further our point, here are some examples of what investors look for and may ask during investor pitch presentations.
People:
Example one: The management team behind the business. Who is building the startup? Does the team have experience with relevant domain expertise? What is the core problem your solving…and do you have a team around that? Who’s your next hire? Is the founder/team self-aware of what’s needed, such as what may be missing from the team? Does the founder have the “it” factor (traits: previous exit, good working dynamic, responsive, open to feedback, flexible, vision, discerning, data driven learner (know their data and how to pivot) determined, empathy with customer, etc…
Pricing and Metric Valuations:
Example two: Instead of merely asking “how many customers and how much revenue do I need to approach Investors?” ask; “Do I have a repeatable progress and a repeatable Customer Acquisition model that I built” (example: “I tried a bunch of different marketing strategies and channels. What’s worked best for us is email marketing. We know this because when we emailed 20,000 people that 2,000 opened our link, 2,000 went to our landing page and that lead us to close 20 new customers…I know which copy (through testing) works best and it leads us to know our CAC and CLV which is X.”
Example three: If an investor asks, “what’s your churn” you can’t simply just say “it’s 7%.” Be prepared, you could say something along the lines of, “It’s 7% and here are the top 3 reasons why they’re churning. Here was the top reason last month which we fixed with this feature, and this is what we’re going to do next month to fix the next reason why people are churning.” This is a data backed answer with an actionable strategy learning from customer data. …is your business plans financials, customer acquisition, market strategy, growth, exit and others key metrics as great as it can be and needs to be? Is your in-person confidence and composure, ability to read a room and perform under pressure in front of a group of experienced investors in the same way a President needs to be composed and confident on stage with his rival? If not, we can help.
Summary
Experienced investors will thoroughly test your pitch and business plan, looking for any cracks in the armor. They will ask you tough questions about your industry experience, metrics, financials and more. If you can't back your claims with hard data and actionable strategies, they generally won't invest.
