Updated 21 April 22
Pitching for investment can often feel like a big and daunting milestone in your startup’s journey. You understand why your startup needs to exist, and how rewarding and lucrative it will be for all involved - but how do you go about convincing external investors?
At Nova, we’ve been fortunate enough to have been involved in 100’s of startup investment pitches, we’ve learnt what works, and what doesn’t. Here are our tips for nailing the perfect startup investment pitch.
We recommend that an investment pitch should be between 8-10 minutes. There’s a lot to cover in that time, so don’t waffle, an investor's time is precious!
We ask our founders' first investment pitches to cover the following aspects of their startup. The problem area, the proposed solution, customers/users, market size, business model, traction channels and competition. Uber and Airbnb’s pitch decks are great examples to look at for guidance. You can find them here.
How do you know that your target audience will pay, download, and subscribe to your offering? And those ambitious sales projections, what are they based on?
Investors will want you to be able to justify your plans and show they’re not just big numbers plucked out of the air to impress. Having a user panel, or early customer base who’ve provided insights and any genuine traction data relating to your business holds great value for investors. This can be achieved even before you have a product built. You can use Google ads to quickly gather data to validate your startup assumptions, as well as several other fast and inexpensive methods for building early, valuable, evidence which can be found here.
The last thing you want is to leave an investor feeling unclear as to what you’re pitching for and how the funds will be deployed. Make sure you’ve done your sums before the pitch and that there’s a sheet that details the breakdown of how the funding will be spent. Whilst you shouldn’t go into every detail of this within the pitch, it should be succinctly explained, provide clarity on the progress this investment will fund, and be available to draw on if questions are asked.
The more you know about your customers or potential customers, and the closer you are to them throughout the development of your startup the better. Being able to articulate a clearly defined target market and knowing where, how and at what cost you’ll be able to reach and convert those customers is incredibly valuable for investors to know.
At Nova, the majority of our tech startup founders have come to us with first-hand experience of the problem their startup is trying to solve. Being able to tell the story from the customer's perspective of how they endure the problem, the scale of the problem, and the benefits that solving it will give users works really well.
There’s no bigger turn-off for an investor to hear that ‘I don’t have any competitors’. Every business on the planet does, and you’d do well to acknowledge them in your pitch. Explain how you’re different, how you can learn from what they’ve done, and the advantage you have over them. If you don’t reference a significant competitor, and an investor does - you’ll either look unprepared or as though you’re hiding something.
Investors are investing in the founder and their team as much as their concept. The stronger and more experienced the team you have behind you the better your chance of success, and therefore the less risky it is for investors. Include enough credentials in your pitch so that investors gain confidence that you, and your team, can tackle and overcome the multitude of challenges, setbacks, and curveballs you’ll face through the life of your startup.
Before your pitch day, make sure that you’ve run through your pitch several times, out loud, and in front of a range of people and trusted confidants who will provide you with honest and constructive feedback. Also, think about the answers to relevant questions that may come your way from the investment panel.
Get feedback from a variety of sources, i.e. those familiar with the industry, technology, yourself, and your startup as well as those who are not - this is really important and will give you a rounded base of comments. Listening to and implementing this feedback into your pitch will make the difference between a good and a truly great pitch.
At Nova, we have created a framework for investment pitches to ensure our founders never miss out any important information when delivering their pitch. This is all delivered as part of our startup school which you can apply for here.
If you have any additional tips for nailing the perfect startup investment pitch please share them in the comments below!