How to Structure an Investor Pitch

investor pitch Apr 19, 2021

Presentations are difficult. Pitching is even more challenging. The reason why is you are dealing generally with more skepticism, more resistance, and you are there to ask for something which gives your audience all of the leverage.

If you find yourself preparing for a pitch in the days or weeks ahead, I want to offer the outline I utilize and the format I suggest to my clients when building a pitch deck. I call it the "Critical 10" because all 10 elements are critical to the success of your pitch. Keep in mind, although I will explain each of these in detail and it may seem like a lot, a pitch should never really extend beyond 20 minutes so you'll need to figure out how to tackle all 10 items in a creative, engaging, and concise manner. Let's cover them one-by-one.

1. The Vision

You want to use this very first part of your presentation to unpack the vision of your company and how it ties to the value that your product or service will bring to the market. This first part of your pitch needs to be solid so consider finding compelling ways to open your talk and be intentional about weaving in your story rather than just stating facts about your new found company.

2. The Problem

This next section of your pitch is about clearing pinpointing the problem for your audience. What is the gap that your product or service fills? What is keeping your potential customer up at night? How will your product or service enrich their lives? It is your goal to make the problem radically clear and significant.

3. The Solution

Now, this portion of your pitch needs to be dedicated to the "technology." What did you find in your research? What is the breakthrough? What is the a-ha moment? What is the "what if" that you were able to figure out that no one has even dared to explore. You want to think of this section as a giant tease as you begin to build on the "what if" to transition into the opportunity.

4. The Opportunity

This stage is absolutely important because the investors are ultimately concerned about the long term value of your idea and how it is going to put their money and more back in their wallets. I would suggest using this section to unpack the long and short term opportunities.

5. The Product or Service

It's time to make the big reveal and address how your product or service will address the earlier problems you shared. This is the time to position your offering as the hero which will remedy the current crisis of the customer. I would suggest focusing on three main takeaways here so your product and service is positioned in a memorable way. For instance, if you are building the next roadster, you want our audience to remember that is energy efficient, fast, and beautiful. Those are your three points, and it is your task to make sure they are remembered.

6. The Team

Once you have covered the basics of your product or service this next section can be utilized to talk about the team that will make it reality. This is a great moment to talk about their credentials, their experience, and how they ultimately add value to the entire mission.

7. The Revenue Model

You need to address how you plan to make money - plain and simple. What are your costs and how fast can you become profitable? The answers to these questions need to be addressed. At the end of the day, finances can be daunting so let's keep this simple. You are asking someone to give you money with the promise you'll make their money back and make them more in the process. Make sure you address that game plan and the timeline it will take to achieve it.

8. The Competition

Let's be real. There aren't really a whole lot of new ideas emerging in the marketplace right now. In that spirit, your product or service is most likely a reiteration of something else so be transparent about your competition. You need to address honestly who exists and what makes you different and better.

9. The Financials

The dreaded financials section. This section is really about two things: growth goals and liquidity. As you explain your growth goals you are most likely going need to operate from projections since you are only really guessing at this point based on industry trends and other historical data. Share those projections and highlight the planned growth trajectory. Next, your investors are going to want to know about liquidity. In other words, what are your current assets and what are your current liabilities. Most investors are looking for a ratio score of 2.0. So, let's say you have $30,000 in assets but you have $15,000 in liabilities. You would take your $30,000 and divide it by $15,000 which gets you a ratio of 2.0. Anything less than this score implies you may have some cash flow problems in existence or on the horizon.

10. The Ask

And finally, we have the portion of your pitch where you need to make the ask. Everything prior exists to build up to this moment. Ideally, you have stated a strong enough case to make your ask so this is your moment to shine and stand confident with your request.

Conclusion

No one ever said pitching is easy. In fact, it is quite the opposite. Your investors have all the leverage but with a solid business idea, careful planning, and lots of preparation, you can win their hearts and more importantly - their trust in you.

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