Funding Investors

How to Pitch an Idea to Investors and Early Customers?

By Dainis Kanopa. July 25, 2018

How to Pitch an Idea to Investors and Early Customers Featured Image

Whether you’re trying to sell an idea to an investor or a client, you have to make sure that your pitch is done correctly. A pitch is something like a proposal on how you will give them something that can benefit both you and them. Think of the pitch as something like the first impression. If you don’t impress your investors or clients with the first pitch, you won’t get them anymore. So, if you have a great idea or plan that you want to pitch to an investor or client, follow these steps to creating a great one:

Step 1: Attract the Client or Investor👦👨🏻‍💼

When you make your pitch, you only have a few seconds to make your audience interested. According to Shark Tank’s Robert Herjavec, you explicitly have 90 seconds to do that. After 90 seconds, your audience will start to bore and probably think of something else.

So, in those 90 seconds, you have to make them interested in whatever you’re about to say. How exactly do you do that? You tap into your audience’s emotions of course!

Yes, facts and figures are significant, but leave them for later! Start with a “why.” Why is your idea exciting and how is it going to benefit you and your audience? Short anecdotes or stories are good ways to grab your audience’s attention and get them interested in your idea. You may also present pain points and tell your audience how your approach can solve all that. Then you can go into details later on.

Step 2: Know Your Audience👩‍👩‍👦‍👦

Of course, you can’t just choose any random way of starting your pitch. You have to know who you’re pitching to and base your start from there. For instance, if your target markets are businesses that want more awareness or engagement and you’re selling whiteboard animation videos, your pitch can focus on how online video advertising brings in more customers as compared to pictures. You can also spin in some real stats to make the pitch sound more convincing.

So before you make your pitch, always make sure you study your audience first.

Step 3: Focus on the Pain Points🎯

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A while ago, we mentioned that you should mention the pain points in your pitch. Let’s talk more about that. When you want to mention pain points, you have to specify the pain points not only on your idea’s potential target market but also on the pain points of your audience. Let’s take investors as an example.

Let’s say that one of the pain points of your potential investors would be their interest to enter the Blockchain industry, but they don’t know how to start. This is considered a big pain point that you can relieve. If you have the tech know-how and the industry expertise, you can offer your idea to them and build a Blockchain company with their funds.

When you’re thinking about pain points, always focus on the pain points of your audience first then the pain points of your potential target market next.

Step 4: Create a Nice Presentation📜

Back in the days, people used to rely more on text on their presentations to get the message across. Nowadays, investors and clients alike both have a short attention span. If you want them to stay awake, then you’ll need to fill in your presentation with a lot of graphics, colors, and overall good visuals. If you want to add some text, make sure they’re only just a bit. It’s better if you use short phrases instead of sentences or even worse, paragraphs. Since you’ll be speaking while you present, you can explain per phrase the message that you want to convey.

Now, for those who think that PowerPoint presentations are the only way to go about, why don’t you try something a little more creative? Most investors, in particular, are not too specific with how the presentation looks like as long as it is attention-grabbing and concise. With that, you can use your creative juice to think of a new way to present your message.

You can use a video, just everyday pictures, Prezi, or maybe even Slidebean. These are alternatives to using the classic, boring PowerPoint presentation. In fact, you may also use a whiteboard to present your ideas if you’re daring and confident enough. Just think of the most creative and striking way to display your thoughts so that your audience won’t get bored.

Be sure to check out Ted Talks for this step they always have great presentations!

Step 5: Do Your Research🤓

After you’ve done your audience research, your initial pitch, and your presentation design, the next thing to do is fill your presentation with substance. This is where your facts and figures will come in. Other than the just pure marketing of your idea, you have to back it up with substance.

Two essential things that you have to include in your presentation are the industry research and competition research. Let’s start with the industry research.

  • Industry Research

When you do industry research, you’ll be looking at the entire industry you’re getting into and give a summary of what it’s like currently. It’s also good to compare its status to how it was at least three years back. For example, if you want to open a co-working space and are pitching to investors, you have to backdate what the industry was like in the past up to present. Statistics would show that the co-working industry has grown 200% in the last five years worldwide. You may also add predictions such as that the co-working space industry is expected to rise in value to $3.8 million by 2020.

You’re telling your investors that the industry has much room for growth and it’ll be an excellent time to take advantage of it. You must also include a SWOT analysis and STEEPLE analysis. The SWOT will tell you the Strengths, Weaknesses, Opportunities, and Threats your idea will have in the industry. The STEEPLE analysis tackles the Social, Technological, Economic, Political, Legal, and Ecological factors of the industry.

  • Competition Analysis

The competition analysis deals with tackling the details of potential competitors. Usually, three direct competitors and two indirect competitors are studied. You would often do a SWOT and STEEPLE analysis for the direct ones. To go over, the direct competitors are the competitors who provide the same or very similar products or services to yours. Indirect competitors are the alternatives to your products and services.

After you present that, you have to show your competitive advantage against all the other competitors in the market. Also, present your selling “edge” or the factors that make your business stand out in the industry.

If you’re presenting to clients, you must also do your industry and competition analysis. However, the message would be to show your client why your business stands above the industry and why it has the edge over the competitors.

Step 6: Introduce Your Business Model👨🏻‍💼

Introduce Your Business Model

This step is more for when you want to pitch your idea to investors. When you pitch to investors, you always have to keep in mind that the primary purpose of a business is to increase shareholder wealth, meaning you have to make sure your investors make money.

Present a framework of how your company makes money through your idea, and how the investors will make money as well.

Step 7: Present the Budget and Forecast💸

Present the Budget and Forecast

For investors, this is probably the essential part of the presentation. In this section, you will be presenting how much funds are needed to push through with the idea. You have to break down all the items required for the project and corresponding estimated prices. From there, you have to create a forecast of how much the company and investors will make. Most startups have estimates for at least two years of operations.

If you’re presenting to clients, this section will be the pricing. Since clients will want to know the prices of the products and services they will be purchasing, you have to be clear on costs. This is also the part where you can pitch promotions and discounts.

Conclusion

Do you have a great idea that you would want to pitch to a potential client or a potential investor? These tips above will be able to help you. If you’re going to be successful in your pitch, there are two things you need—excitement and substance.

You’ll need the element of excitement because you want your audience to pay attention to what you have to present, so you’ll have to be very creative every time you give a presentation. You also need substance because you need to build up your credibility. If you have no content to offer to the table, then your audience will ignore you. With the right combination of hype and facts, you’re sure to convince your potential investors or clients of your idea. The steps above will give you a delicate balance of both😅.