Dear Professor Investor, I have an idea for a product, but how do I pitch it to investors?
Will from Kingston.
The investor pitch is one of the most important aspects of any business. If you cannot tell people what your solution is and why it matters you are done before you start. There are three main types of pitches you should prepare for; the elevator pitch, short form pitch, and long form pitch.
The elevator pitch is typically a one minute pitch that will tell someone what your product is within a 1 minute elevator ride. An elevator pitch must meet three key characteristics: The pitch must be concise (never more than 1 min), clear (no jargon), compelling (induces greed), and irrefutable (statements you make are hard to deny). An example of an elevator pitch for Wikipedia is as follows:
Are you tired of all of those yearly encyclopedias taking up space? Do you even have the money for encyclopedias? Wikipedia is an online encyclopedia that is both free to access and is updated regularly allowing you to learn about the world in a faster, easier, and a more recently updated way.
For more on Elevator Pitches check out this video:
If an investor likes your pitch they may invite you for a short form pitch where you will tell them more about your company. This short form pitch it typically 5-10 minutes long and should include some basics about your company, such as the problem you are solving, your solution, your team members, the market you are in, the competition, some financial highlights, goals you want to reach, and info on your founding team.
If an investor is really excited about your product, they may then invite you to a long form pitch. The long form pitch is a formal pitch that tells investors everything they need to know about your company to invest in it. For the long form always follow Guy Kawasaki's 30/20/10 rule when it comes to using slides for the long form pitch. The 30/20/10 rule states that font size should be no smaller than 30 point font, the pitch should be no longer than 20 minutes, and you should use no more than 10 slides. This forces you to be clear and concise about the main ideas of your company. You want to pitch your venture in a way that the investors will get your point and want to learn more. If you can make all of your pitches clear, concise, and irrefutable you have a good chance of not getting an early no!
I also strongly suggest that you replace any and all subjective self interested statements ( e.g. we have the best app) with objective arm's-length evidence (e.g. Our app was downloaded 50x more than the current market leader). In my five seasons on Dragons' Den (e.g. Shark Tank) I never met an entrepreneur who wasn't building a venture the next big thing. As a result, investors need something other than the founders words for evidence. In the immortal words of legendary VC Brad Feld: Show Don't Tell. Always use objective data (e.g. % of users that return to the site everyday) as evidence for subjective facts (e.g. customers love us).
Questions can be sent to email@example.com or to @SeanWise. Please be sure to include "Dear Professor" in the subject line. For more startup wisdom check out Dr. Wise's new book: STARTUP OPPORTUNITIES: know when to quit your day job