Anyone who has launched a startup knows how an impeccable pitch is essential to introduce oneself to investors. It helps win competitions, calls for local and foreign incubators, and raises funding on an equity crowd-funding platform.
The pitch is the business card of a startup. It is a presentation that lasts a few minutes and is accompanied by slides in which the team illustrates their startup to potential investors, business donors, venture capitalists, or other interested parties. It is one of starting a startup’s most critical and exciting moments. It is the “call to action” that you cannot go wrong!
But how can you be comprehensive and persuasive in a few minutes? Presenting your startup to investors is an art, and there is no unique way to do it. But in the most effective pitches, we can find recurring elements and some critical factors to pay attention to.
THE NARRATIVE LOGICAL STRUCTURE
Analyzing the successful pitch decks of famous startups all over the world and the advice of the best coaches and experts in the sector, we can grasp a recurring structure, more or less articulated, which can be summarized as follows:
No matter how brilliant or unique your idea is, if it doesn’t meet the needs of the mass or a niche market, no one will put a dollar on it. Therefore, the first rule is to present a product that solves a real problem. The more this problem is felt and annoying, the more people will be interested in your product.
The problem describes the importance of a specific issue for people and motivates the need for the startup, while the solution illustrates how it intends to solve the problem.
The combination of the two slides (problem/solution) is fundamental for the pitch deck of each startup as it gives it the reason for existing, defining the mission and vision of the company. You will have already done half the work by capturing your audience with an interesting problem and a compelling solution.
The goal of every startup is to build a sustainable business on the solution created; it takes a market to which to convey this solution. Always include a slide describing how many people could buy your product because it lets investors understand the potential market in qualitative-quantitative terms. Always refer to reliable sources to support the weaker parts of your estimates.
An excellent way to approach this point is to follow the “Macro to Micro” rule: start by identifying your target, the size of the market, and its growth rate, and then go into detail:
- Potential Market: People interested in buying your product, including the overall expenditure of a particular sector;
- Served Market: the market served corresponds to that part that you aim to reach with your product/service or the people you can serve
- Market Penetrated: the market share corresponds to the percentage of the market served that you expect to obtain.
Don’t make the mistake of thinking that, being a startup, your company has no competitors. Having competitors in your business is not bad; on the contrary, it confirms that there is a market. Competitors are not to be feared but known, it lists vital information and results but is differentiated based on positioning and distinctive competitive factors. If your proposed solution is truly special, innovative, and unique, the potential disruption you can bring to the market will emerge even more clearly.
Sometimes it can be effective to use a positioning matrix or to represent companies with a similar business model that do not operate in the same market.
This section describes how the company generates value and intends to ensure an economic return appropriate to the risk profile for investors in the medium to long term. Put as, “How do you plan to earn?”. If you ask someone for money today, you need to be able to pay back more money tomorrow. This is the basis of any investment.
To succeed in your intent, you must demonstrate that you are clear about the channels and the logic to produce revenue through a solid, credible, and preferably scalable business model.
Suppose your business model has already been validated. Do not hesitate to show your results and economic-financial projections for the next 3 years. Also, indicating the key business metrics (engagement, active users, conversion rate, customer acquisition cost, lifetime value, etc.) will allow investors to understand the project’s sustainability.
A business is made up of people; they are the real element of success. It is the people who make the difference in the execution or the realization of the business idea.
In highly innovative projects, a good team must have competent professionals with diversified and complementary skills capable of covering the different company areas. Communicate “who” does “what” within the team. Use photos to show your peers’ faces and personalities and your organization’s structure, highlighting each member’s roles and past experiences. Remember to have the key figures for the type of business you operate.
It may also be useful to include any prominent advisors or investors but keep them separate from the operations team.
This section allows you to specify the request for funding, the progress in fundraising, and the expected allocations.
That’s why I pitched. You have made a compelling presentation and kept the attention high. Now the time has come for the final call to action: how much you need to achieve what you have in mind.
Do not be afraid to ask; everything you have told in the previous points has enabled you to make this request. Remember always to give a precise figure. Before arriving at the request, it may be useful to make a recap of a maximum of 10 seconds of the main salient points.
As you will have understood, knowing how to communicate your startup with a compelling pitch is essential. Spectup is a startup consultancy agency and a pitch deck consulting service that can help you express your startup successfully through a business plan and many more.
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