How To Raise Money For Your Idea? Inspire Don’t Inform
Pitching investors is a pain in the neck.
Ask 100 investors what they want to see in a pitch you will get 100 answers because:
Investors don’t actually know what they want from a pitch.
Sure there are a lot of things they need to know before they invest in your company.
They will want to see your numbers and make sure you have a viable business concept that they believe will make a lot of money.
They will want to know your business plan in excruciating detail.
Investors are making a big bet on you so they will want to know what you bring to the business, your credentials and your history.
And, they will want to know that you will stick with it and make the business work through all of the crazy annoyance and long hours of starting a business.
They will want to see management skills and the ability to pivot when necessary.
The list goes on.
Here’s the thing: you can’t fit all of that into a 6-10 minute pitch to investors.
In fact, you will be hard pressed to fit that into a 2-hour deep dive…
When you ask these hundred investors they will be adamant that you must communicate everything.
But, if you end up taking all of their advice and forcing everything into a pitch, your presentation will be so full of data and information that nobody will pay attention.
Nobody will remember.
Because, people, including investors, don’t remember facts.
If you present everything, nobody remembers. If you present nothing, nobody listens. Yet some people are able to make it work… how?
The secret to a great pitch is to inspire.
I was at a pitch event the other day watching bad pitch after bad pitch on a panel of angel investors. One of them said to me: “don’t they get it? We just want to be able to go to a cocktail party and be able to say that we invested in that great company in the beginning.”
And therein lies to clue to connecting with investors: they want to be the hero.
When they are listening to an 8-minute pitch they are looking for the numbers and the evidence and the great idea but mostly they are looking for a spark of confidence that you are the next great entrepreneur.
They want to believe that you will make them money and make them look good.
The best pitches tell a story with a compelling market challenge a great solution and a clear pathway to making money. They inspire investors with the opportunity.
The key word is: inspire. They don’t inform. They don’t bombard with facts. They connect to something internal, a feeling.
In fact, the most spectacular investment pitches give the investors a story that is so good
they end up telling their friends.
And so, begins the growing snowball of interest that funds a startup.
Don’t give them everything they want, tell a great story.
You do not have to answer every single question that an investor may have in an eight-minute pitch. You just have to inspire them to ask questions by telling them a great story.
Engage them in the beginning with the problem, wow them with the market potential and impress them with the simplicity of your product and clarity of thought.
Then be ready to answer the questions.
When they start grilling you afterward just realize that you have already won.
You are already in the next conversation, now you just need really good answers to their questions.