Investment Pitch Tips for Startups. Get 2023 Off to the Best Start

Preparing to pitch your business idea to an investor but unsure of how to impress them? Putting together a strong pitch isn’t enough to gain the trust and confidence of the investors. This blog breaks down what investors look for in a business pitch, so that you can go into your pitch meetings with a winning attitude and confidence.

All businesses need investors, especially when they’re just starting out. Some investors will be content to solely provide funds, whereas others will want more of a say in how their money will be spent, and what kind of return on investment (ROI) they will see.

Whatever type or size of the investment you are looking for, the best way to impress potential investors is with a well delivered pitch. Here are a few investment pitch tips for startups to consider:

Research your investor

There are different types of business investors, including angel investors, venture capitalists, and personal investors. You may select the type of business investor based on your required funding and the control rights you’re willing to give up. You need to research their previous investments and how well they are performing.

Also, you need to know how well they know your industry and how much resources and time they can devote to your business idea. You must also demonstrate why you’re willing to choose them as your potential investors. In the years to follow, the best way to stay updated with the latest activities in the startup ecosystem will be through social media. With over 4.26 billion people regularly using social media, it has become a necessity for businesses to have an online presence.

Have a professional pitch deck

You need to add a visual element to your pitch for maximum impact. No matter how convincingly you talk or how charismatic you are, the investors need some substance to look at. The pitch deck provides an overview of your business and should be made using professional presentation software. Tables, charts, and graphs should support financial data and forecasting.

The pitch deck should include details of who the people behind your business are, the problem you are trying to solve, and your product or service which acts as the solution to that problem. Furthermore, you can add elements like traction, the current market, your competitors, details of your business model, and how the raised funding will be used. Make sure to include your contact details on the final slide, which can be left on the screen once the presentation is over.

Length of pitch deck

One of the most important investment pitch tips for startups is to ensure your pitch deck is no more than 15-20 slides long. You need to be straightforward and concise when delivering your presentation. A presentation that is too long may become boring and time-consuming for investors. Use bullet points in the slides; don’t make them too wordy.

While you should tell the investors why you are providing better value than your investors, you should not belittle or underestimate them. Ensure that the facts and market statistics you provide in your pitch deck are up to date.

Explain the problem you're trying to solve with your business

A problem needs to exist for your business to be the solution. This is where the value and market credibility of your business is demonstrated. Who is your target audience, and what are their pain points?

If your product is a niche, your potential investors may not be aware of the problem you are trying to solve, so you should provide data or evidence that supports it. Presenting the solution and the value that your business provides is also one of the most critical investment pitch tips for startups.

Outline your USP

What makes your business different? You need to be crystal clear on what your business’s USP is and be able to communicate it in your pitch. Since the beginning of the internet age, the number of active companies has grown exponentially, and the markets for most products are saturated. This means you need to identify what makes your product or service unique from or better than what is currently available in the market.

It’s often not enough to just improve the specs of a competitor’s existing product, as they'll likely do that on their own in the near future. They have the advantage of already being established, whereas new businesses are a gamble for investors. Investors need to be sure your business has found a real gap in the market that can be capitalised upon.

Show your dedication and determination

It has been said that investors invest in people as much as they do products. So, one thing investors are looking for in your pitch is to understand the type of person they’ll be doing business with. This doesn’t mean you need to be the most charismatic person in the room, but you do need to demonstrate that you possess the type of work ethic necessary to make a new business succeed.

Anyone can say they are dedicated to making their business work, but do you have anecdotal evidence you can back that up with? If you can show that you are willing to put yourself on the line for your business, investors will be confident that you are equipped for the challenges a new business faces. This assures them that you will not become complacent once you are stable – investors want to know that the business will continue to grow!

Demonstrate knowledge of your product and industry

You’ll likely be asked technical questions in your pitch. These can include:

• the logistics of your industry

• the science behind your product,

• the current research surrounding the problem you are trying to solve

…And more! Answering these questions confidently shows your expertise and that you have thoroughly researched the current market.

Even if you’re breaking into a new market in that you don’t have any first hand experience, it’s worth mentioning how you've addressed that problem. For example, you may have hired someone with experience to manage a specific part of the business or are currently undertaking a qualification to understand the market better.

Explain your intended marketing strategy

So much of modern business relies on marketing. In an increasingly interconnected world with saturated markets, your marketing strategy is how you’ll attract business, whether that’s customers or clients. Put simply, your marketing strategy is how you make your mark in the industry.

Most successful marketing strategies are multifaceted and will have plans to approach marketing across different platforms, such as social media, print advertising, and live promotions. You should also include a timeline of when different strategy phases will be rolled out.

Your marketing strategy hinges on who your target audience is and where they're most likely to see and respond to your message. If you're not confident in your ability to devise a marketing strategy, you should consult a marketing expert before your pitch to get additional insights. If you keep these areas in mind when preparing for your pitch, you’re sure to impress your potential investors - and hopefully get that much needed funding for your business!

Introduce your team

When it comes to the investors, the team’s credentials as a business hold much more value than the product or service it provides. Investors look out for two main factors in a team: commitment and ability.

If you prove that your team has the technical ability to solve business problems efficiently, it might cover up the weaknesses in any other area of your pitch deck.

With the limited number of slides in your pitch deck presentation, you must be concise when introducing your team. If you have too many team members, make sure to focus only on the core staff, including the advisors, executives, and co founders. You need to prove that you’re the absolute best team in the market!

Your funding needs

How much funding is required? Do you seek a convertible note or an equity round? Will you need to raise multiple rounds of financing in the future? Investors look out for solid numbers and financial projections regarding a business pitch. You need to spell out how the funds will be used clearly. You also need to be clear about the pre-money valuation of your business.

This may be calculated using the Market Multiple Method. This assumes that similar assets have a similar value. The better the calculations, the better your chances of raising the funding. The investors will appreciate that you understand the financial metrics required to run a business.

Tone and body language

The tone and the body language in which the pitch is presented play a significant role in convincing the investors. Using proper hand gestures, facial expressions, and posture shows confidence.

According to MIT Sloan research, your success at pitching to investors is strongly influenced by your tone and the level of physical activity as you talk. You should make sure to avoid a mind numbing and dry presentation. Keep it engaging, and avoid gestures that show you as shy and unassured.

To sum up

You need a pitch deck to summarise your business, the solutions it provides, the team, the marketing conditions, and how it plans to operate and earn revenue in the future. And, you need to make sure your personality and your team shines.

Here at Accountancy Cloud, we’re dedicated to helping startups like yours thrive. Whether it’s CFO support to secure that all important funding, or help with R&D services, our all round accounting support is ready to help. Get in touch today.