For many start-ups, pitching to a group of investors is one of the scariest but also the most important parts of the journey, that can determine their future. In order to learn the secret to pitching, we asked some start-ups on how to successfully sell their idea.
A pitch is when entrepreneurs or start-ups convince investors to invest in their business concept.
The capital raised from investors will help these entrepreneurs and start-ups to develop their business, potentially funding overseas expansion, further research or new products.
To make things even more challenging,many of these people pitching are on a strict limit of two minutes to get their idea across and hook in investors to invest their money.
Compare this all you want to a high school speech contest, but the difference is there is money on the line, a lot of money. That can be intimidating.
Pitching your company in two minutes in hopes to get thousands, maybe even millions of dollars in investment has now become an art form.
To unlock the not-so subtle art of pitching, we ask the question to start-ups who have recently pitched at the annual venture capital firm, Icehouse Ventures showcase, now in their 13th year.
But this showcase was unlike any other. Instead of a group of investors, this was a crowd of 800 at Spark Arena, essentially pitching on steroids.
Samantha Gadd, co-Founder and co-CEO of employee experience platform, Excellent.io says her main tip for pitching is focusing on the purpose and passion.
“Focus on your purpose and the passion you have for the change you want to make in the world, it will shine through,” she says.
From personal experience, Gadd says that having a short video reel from leaders and customers has really worked for her in showcasing the global traction they have received.
Shaun Seaman, Founder and CEO of Mushroom Material, a company that hopes to eliminate non-recyclable plastics, says that a tip that has consistently worked for him is keeping the message clear and repeating it.
Read more: How does venture capital work?
“For us, we are producing a mushroom-based material as a direct replacement to expanded polystyrene – I continuously repeat this message throughout any presentation or pitch I do,” he says.
“It helps to reinforce your message and give the audience something to grasp onto whilst they build a mental image of the company. Don’t leave any room for their mind to wander or to get confused.”
His other secret is making his pitch become a story, whether it is two minutes or 10 minutes long.
By making use of story-telling, Seaman is able to build emotion, which is vital and the most important aspect of pitching.
“I don’t pitch our company so much as explain the story around why there’s a problem, why we need to solve it and how we’re going about doing that – I purposefully let the audience come to their own conclusions as to why we’re brilliant, albeit leading them to that conclusion in a clear and concise way,” he adds.
Amber Joseph, Founder and CEO of NextWork talks about the part of pitching that is often overlooked: the question and answer portion.
Her tip is to record every question ever asked when pitching.
Every time she has pitched, Joseph has realised there is a theme of questions, so preparing for those questions will help pitchers “plug that hole in your pitch faster”.
Her last tip: “never go in hungry”.
When it comes to pitching with a technical jargon, Sean Feast, CEO and co-Founder of Precision Chroma, says to make it digestible through analogies and layman’s-terms.
“This was one of the hardest parts for me, as our technology is quite complicated and in a niche area that few investors have background experience in. If you can describe your technology using a simple analogy it goes a long way to sparking an investor’s interest,” he says.
But what about tips from an outside perspective, the people who are listening to the pitches and putting money on the table?
Barnaby Marshall, a Partner at Icehouse Ventures, says the most effective pitches are really the simple ones, the simpler the better.
In five minutes, it is best to focus on strengths, whether it be numbers and performance, the team, experience or the technology; focus on one aspect that is worth mentioning for the timespan.
“There are only a few messages that the investors will be able to retain from the presentation of this format, what are those three things that you want to have them take away?,” says Marshall.
“Keep the slides super simple, they should be an exclamation point on a sentence, not a sentence by themselves.”
Some of the best pitch formats include macro truths that are familiar to give background and context, customer stories to identify the pain point and build empathy with the problem and analogies, for all the tough tech jargon.
But out of all these tips from experts in pitching and venture capital partners, the most important tip that should be taken away from this, is confidence.
Marshall says that their most successful pitches are those who are “incredibly polished and confident”.
Would you trust hundreds of thousands of dollars on someone hesitant in pitching?
“Confidence comes from being clear in your message and content.”