Pitching to a New Audience
Once you’ve garnered investor interest, the next step is creating the right pitch. Historically, pitch decks were targeted at investors who knew the company well. When marketing to a more general audience, you must work with a different set of assumptions.
Not all investors will understand the business, let alone the market opportunity. The pitch has to be broadened, well-supported, and designed to attract the right potential partner. Think of it as fishing: In a small pond with fewer species, you know exactly which type of bait to use. With a huge lake, you’re making an educated guess.
Crafting Your Pitch
To give you more than a shot in the dark, here are some guidelines to craft a successful pitch.
- Clearly show the potential for return. Investors are interested in how an investment can mature, earn a profit, and get them a nice multiple on exit. Explain how scalable the opportunity is, the size of your market, and how disruptive the product or service will be to this market. Most importantly, clearly explain how you plan to earn revenue.
- Don’t get caught up in “how it works.â€ Many entrepreneurs get caught up in the technical details when pitching their business ideas, but investors don’t care nearly as much about how something works as they do about the potential impact it will have on the market.
- Ensure you’re pitching the right investor. The wrong partners can be toxic. As you discuss your business idea with investors, consider whether or not they’re a good fit for your startup. Just because they have money doesn’t mean they’ll make good partners. (This goes beyond ensuring investors meet the criteria in the regulations.)
In addition to the guidelines above, the key is giving the investor confidence that you haven’t invented the numbers or the market opportunity. You want to convey that your prospects are very real in a way the investor can understand. By doing your homework, marketing to the right investors, and carefully considering each prospect, they could create a great opportunity for your business.
Alex Friedman is the co-founder and president of Ruckus, a full-service agency, tech partner, and accelerator that is devoted to helping businesses grow. At Ruckus, Friedman has been at the forefront of developing technology for nearly a decade, advising entrepreneurs and growing brands and Fortune clients alike.
The Young Entrepreneur Council (YEC) is an invite-only organization comprised of the world’s most promising young entrepreneurs. In partnership with Citi, YEC recently launched StartupCollective, a free virtual mentorship program that helps millions of entrepreneurs start and grow businesses.