What Went Wrong With Your Pitch?
For this reason, you often hear an emphasis on perfecting your pitch—that quick explanation to an investor about what you are about, how you are profitable and why any investor would want to get in on the ground floor. Everyone has their own ideas on this success, but the fact of the matter is that it is a different animal to articulate that to someone who likely hears tons of pitches on a daily basis. Whether you were forgettable or memorable for the wrong reasons, a recent Black Enterprise article explains where your pitch may have gone wrong.
For one, a pitch is not like a commercial and forgetting this is a sure way to get tuned out. Don’t forget, you are talking to investors, not consumers. As a result, your concept is important, but you also need to explain the profitability of the product. An easy way to break this down is for one 10-minute pitch, two minutes should go to describing your product. A few minutes then will go to the market and how your product fits into it, and the rest goes into making it profitable.
A lot of times, passion is what carries a startup through those rough beginnings, but when it comes to your pitch, it’s easy to fall into the trap of using this in your pitch. The truth is that most investors don’t care about your passion. The most important thing is that your investor is able to get their money back plus a profit in the end. To get this across, you need to include an exit strategy in the pitch. If you talk too much about your business’s potential versus its profitability, some investors may think that you don’t have an exit plan. As a result, the investor can’t get their money back. Be ready to address who you would divest to and how you plan to do that.
By the same token, don’t ignore the numbers. Be ready to say how much your production costs are, how much money you are planning to raise and how it will be spent, along with specifics. Even if you aren’t the numbers guy at your startup, you need to get the stats in order to convince investors that you are serious about business success and profit, the things that are most important to them.