But in that short window of time you get with the investor, what should you aim to get across? And what should you avoid?
In this article, we ask UK-based investors for their insights into what makes a winning pitch.
“Investors are individuals. If you’re trying to raise funding, you’re actually trying to sell shares in your business to people. It’s about engaging someone, getting them excited and interested.”
|Rod Beer Managing Director, UKBAA|
Get to know each other
Hopefully you’ve already done your homework and you’re entering the meeting with a detailed knowledge of your investor and how they operate.
Your job now is to establish a solid relationship with them. You should start off by building a rapport.
Investors need to be sure their investment will be in safe hands. Although they may learn a little about you when you first approach them, they’ll look to find out much more during your pitch.
For example, as the leader of your business, do you have the character, ambition and drive to succeed and deliver a return on their investment?
But they’ll also want to know they can connect with you on a personal level.
“That personal involvement is key,” says Jenny Tooth of UKBAA. “We’re investing in the person — that’s the main thing. Our confidence in you and your team. The personal bit of that is fundamental.”
“We talk to people all the time about their businesses,” says Alistair Brew of BGF. “We need to like them and they need to like us and there has to be some sort of catalyst, some sort of reason as to why an investment actually occurs.”
One such catalyst might be to demonstrate that you’re focused on more than just finance. Showing a keen interest in the investor and their work — as well as other things outside of your business — could mean you stand more chance of building a good working relationship.
If a third party — a colleague, a friend or another entrepreneur, for instance — made the initial introduction, using that as a starting point for a conversation could work in your favour.
“It’s all about how you tell the story, how you express yourself and how you respond to investors’ questions.”
|Atuksha Poonwassie Managing Director, Simple Crowdfunding|
Tell a story
When pitching, it can pay to present your information as a narrative. Reeling off facts can be boring, so craft stories around, for example:
- how you and your team rallied round to solve a complex problem
- how customers use your product
- how your product aims to improve people’s lives
“The story is incredibly important when you’re looking for money,” says Jenny Tooth. “I don’t know you yet, so you have to captivate me. And a story makes it easier for me to absorb and engage the information — it pulls me into the problem and why you’re solving it.”
And your story might fare even better if it incorporates your vision and ambitions for the business.
“At the end of the day, we’re taking a view on the future, which is inherently risky,” says Alistair Brew. “We’re talking about a journey, so we absolutely need a story and a vision to make that worthwhile. Without it, it’s quite hard to buy in to.”
But there’s nothing to say you must set down your vision in a brochure or document. Many investors simply want to hear the figures.
“When a person stands in front of us, we’re looking for a combination of big vision and a grasp of the details that make a business tick,” Brew adds.
“People often ask us, ‘Are you prepared to invest and if so, how much and on what terms?’ But to answer that question, we don’t need them to spend weeks writing up a glossy plan. We can engage with people just on a set of numbers.”
“Your toolkit is a good pitch deck that takes an investor through all the key areas. Show them what they need to know: the financials, your customer base, your margins. Show them what it will cost to invest in your business.”
|Rod Beer Managing Director, UKBAA|
Present your pitch deck
By the time you come to pitch, most investors will have asked to see your pitch deck. This short presentation of slides sets out all the important aspects of your business, such as:
- your product
- your team
- your business model
- some key financial data
The deck you send to investors prior to the pitch can be fairly detail-heavy. With the version you use to support your face-to-face presentation, consider using less text and more visual information.
Both should be clear, simple and compelling, as their purpose is to spark interest in your company and get the investor engaged and excited.
Make sure your deck has information that the investor can read and understand without needing to see the accompanying presentation.
The key here is to convey the important information about your business concisely, so the investor understands exactly what they’re getting if they decide to invest.
The checklist below tells you what you should include in your pitch deck:
A good pitch deck might contain slides that explain:
“As Angels, we don’t need business plans when first evaluating a deal. Think about it from the sales approach — if you buy a house or car, you don’t get a 20-page manual. You get a brochure. Make it easy, show the key things that matter. Be concise.”
|Jenny Tooth CEO, UKBAA|
Business plan — yes or no?
There’s some debate over whether business plans are useful, and not all investors will want to see one.
Those that do will expect an in-depth document that outlines every aspect of your business — basically everything from the pitch deck but in much greater detail.
However, it should be clear, well-written and backed up with relevant and accurate research and data. After all, it’s intended to help an investor make a decision about whether to offer you finance.
“At some point, a business plan has to be created,” says Alistair Brew. “In our world, that can simply mean a set of financial projections that show how the company will grow with a particular amount of funding invested.
“And then we need to understand the assumptions behind that. And that’s the basis for our understanding. That’s the moment when a process actually starts.”