One area of your business where you cannot afford to take a “set it and forget it” attitude is your investment pitch. Whether you are pitching to your first potential investor or subsequent ones, your pitch must be customized to ensure the highest rate of success. Even more important, however, is how you adjust your investment pitch over time and during changing circumstances.
Whether you’re dusting off your existing pitch or ready for some heavy editing, here are eight reasons why you should constantly refine your pitch.
1. Every Investor You Meet Will Be Different
Investors differ in many respects. There are investors who are specifically interested in startups with no other investors, and there are those that are only interested in businesses that already have some funding.
There are investors that want to invest small amounts into multiple startups, and there are those that want to invest large amounts into fewer sound startups. Within all of these groups, there are investors who are interested in tech companies, and there are those that are interested in businesses outside of tech.
Researching investors you want to pitch will ensure that you are approaching the right investor for your specific type of business at the current stage your business is in. This will save you time and help you refine your pitch accordingly. Sites like AngelList allow glimpses into the minds of startup investors like Sumon Sadhu, featured on the website’s homepage.
2. Your Funding Needs Will Change Over Time
Your funding needs in the early days pitching to your first investor will vary greatly from your needs as a startup that already has multiple investors. Once you have gained your first investors, refine your pitch to let new investors know where your business funding stands. This will make the funding process go a lot smoother.
3. Show Some Conviction
If your pitch is not getting the response you want from investors, then you need to look at ways to tap into your potential investor’s emotions. Sell them on your product like you would your customer—if your investor would be willing to buy it, they might be willing to invest in it too.
A good example of an investment pitch is PinMyPet, which evokes emotion from pet owners or parents alike by using key visual imagery.
4. Your Business Gets Exposure
Reputable media attention will catch your potential investor’s eye as it shows that your market is interested in your products and services. Each time a major media outlet mentions your business, capture it and include it as a part of your refined investment pitch.
Manpacks does this by highlighting specific quotes from well-known customers along with logos from the media outlets that have mentioned their product.
5. Your Business Has Substantially Changed
As you work to build your business, it should become more impressive over time. If your business has experienced a significant change in customer acquisition or financial projections, those should both be reflected in your refined investment pitch.
6. The Market Has Substantially Changed
Most markets will evolve as time goes by. If you include statistics from your market research, be sure to update those statistics if newer information becomes available. You would not want your pitch to be based on old data that an investor calls you out on.
7. Your Competition Is Evolving
With more players entering your target market, said market becomes hotter, which can attract interest in your product or service. When seeking investors, make sure you include parts of a thoroughly researched competitive analysis.
With an analysis in hand, your refined pitch should tell investors who your latest competition is, and how you have them beat in your industry. It shows investors that you not only keep a close eye out on competition, but that your business cannot be shut out by them.
8. Your Exit Strategy Becomes Clear(er)
Investors want to know your exit strategy. Do you plan to go public? Do you want to be acquired? While you cannot predict the future, you can attempt to anticipate it with the help of internal data (e.g. sources like revenue forecasts and market assessments) and exits made by similar companies (e.g. how similar companies were acquired or offered through an IPO).
A clear exit strategy not only gives your company something to strive towards, but also gives investors a clear expectation of when to expect a payoff.
Whether you are a startup looking for initial investors or a business looking to seed your next idea, it is paramount to refine your pitch throughout the process. Doing so will help ensure that you connect with the right investors by presenting the data they need to make the decision to invest in your company.
For even more great information on how to get the attention of investors, read our piece on how to refine your pitch for success.