A pitch is the process of verbally presenting a business plan. In a Forbes article, billionaire entrepreneur and Virgin Group founder Richard Branson shared the following five essential elements of a perfect pitch.
- According to Branson, it is vital that you include the financial and legal plan. Investors and partners should know when they can expect to see a return on their investment.
- In order to win the trust of an investor, you should be able to illustrate your knowledge about the business concept. Discuss the step-by-step plan clearly. The business plan should indicate a healthy return of investment. Branson discourages the use of phrases such as “It is hoped…”or “With some luck…”
- The billionaire explains the importance of stressing how your business will do better than the competition. Stress your strengths over your rivals.
- It is natural for partners and investors to seek evidence that you understand the market. Branson suggests starting with a problem before discussing the solution. Demonstrate how your product or service can answer the problem.
- Demonstrate your bench strength to prospective investors. Emphasize the competence of your team at your new company.
A pitch is all about convincing investors to invest money for your new business model or concept. Entrepreneurs may pitch a request for funds for a certain percentage of equity in the business.
The presenter lays out the details of the business plan and ends with a question and answer portion to accommodate inquiries from potential investors. Here are several tips for a successful pitch.
- To deliver a great pitch, you should begin by understanding your audience. Gather information about them. Determine if they are inﬂuencers or decision-makers. Find out what kind of decision power the audience have in terms of investing in your business model. Capture their interest. Your data should be interesting to the audience. Give them reasons to trust you and believe in your business model.
- Create a strong business plan. Make sure that your information is accurate. A careless mistake can negatively affect investors’ trust and confidence. Investors can reject a pitch when the presenter appears disorganized and inconsistent. Lack of direction can also get in the way of securing the approval of investors.
- Keep in mind that investors will be willing to invest money only if they are assured of returning profits. It is up to you as presenter to convince investors that you have a sound business plan. It is not enough that you catch their attention. You should be able to convince them. In your pitch, expected revenues and costs of the business model should be supported by realistic and detailed assumptions and projections according to Forbes.
- LinkedIn co-founder Reid Hoffman said, “Open with your investment thesis, what prospective investors must believe in order to want to be shareholders of your company.”
- Prepare for the business pitch. Practice beforehand to avoid making mistakes during the actual presentation. Make sure that you are familiar with your choice of multimedia. You can request family or close friends to listen to your presentation. They can help you by giving you constructive feedback.
- Show respect to investors by dressing professionally. A professional and smart look can project credibility, authority and certainty. In a Forbes article, Alexa von Tobel founder and CEO of LearnVest.com said, “I’ve always felt it’s important to mirror in a business meeting setting,” she says. “If I’m going into a venture funds office and meeting a lot of partners I’m going to dress to match their corporate culture, but if we’re meeting for coffee around the corner I won’t be in a full suit.”
- Avoid wearing too much make-up and accessories. Large earrings and bangles that create noise when you move your hands can distract the audience. Do not wear overpowering perfume.
- Present yourself as a smart and confident individual. Be mindful of your posture, hand gestures and tone of voice during the pitch. Maintain good eye contact with the audience. Make sure that your voice can be heard across the room.
- Show enthusiasm in your presentation. Positive energy is one way of expressing your passion for your business concept or model.
- Hoffman also mentioned that when pitching by analogy, it is advisable to refer to other successful companies to signal that your business model will be valuable as well.
- Stress your competitive advantage. It should be unique, sustainable and relevant. Demonstrate why your product or service is different and better than your competitors. Illustrate how your advantage over your competitors can increase shareholder and stakeholder value. Reinforce your advantage by providing statistics and concrete examples.
- Investors often demand a lot of information from the presenter. When you encounter a question that needs further research, do not reply with “I don’t know”. You can say, “I don’t have the answer right now but I can find out.” If you’re trying to capture a whole new market, data may not always be readily available. You can find a way to gather as much information as you can about the business model.
- A great pitch is not just a presentation of facts and numbers. It should be able to tell a story. Talk about your business idea or concept and the business that you envision to build. Make your story more interesting and exciting with the use of multimedia.
- When setting an appointment for your presentation, you can ask how much time is allotted to you. Catch the attention of the audience and build your pitch. Avoid lengthy presentations. Keep your pitch short and direct to the point without sacrificing content. Make sure that all your facts are straight.
- Be open about possible risks. Hoffman recommends identifying the risks that could hinder you from achieving your goals and explain how you intend to deal with them. It is better to present the risks to investors than wait for them to point out the pitfalls. This proactive approach can build trust.
Photo c/o Pixabay. Public domain.
Rachel Yapchiongco, also known as Rach to her friends, is a Psychology and Marketing Management graduate of De La Salle University. Rachel is a full-time mom to a charming young boy and married to an entrepreneur who has a passion for cooking. She shares parenting experiences and slices of everyday life on her personal blog called Heart of Rachel.