Deliver The Perfect Elevator Pitch

Attracting investors to your venture is an extremely daunting task, and can be the most important thing you ever do in your business life.  In the spirit of disclosure, we spent the better part of 2010 trying to raise seed funding.  We actually received a term sheet in December, but the terms were outrageous so we continued to bootstrap and fund our site using Google Adsense which we highly recommend.  We’re still in complete control of Jobtrakr and excited about the future.  Now this isn’t to say that if the right investor comes along, we’ll turned down the money.  Let’s not get crazy.

We did a lot of things to put us in a position to network and eventually demo in front of a group of local Angel investors.  Before you put together your first deck or get your demo together, you will need to have an outstanding elevator pitch.  An elevator pitch is a quick 2 minute summary of your business. You basically have enough time to tell a potential investor about your company in the time it takes for an elevator to reach its next stop.  This is no doubt nerve wracking, but imagine the doors that could open if you hit it out of the park.  Your elevator pitch isn’t going to get you funded, it gets you a follow up meeting.  Imagine what you would say if you were in the elevator with Warren Buffet or Bill Gates.

Basics

Investors are humans too, so it’s important that you come across as friendly, intelligent, ambitious yet respectful.  If you approach them as anything else, your wasting their time and yours.  The key is not to look desperate.  They can smell desperation a mile away and nobody wants to invest in a desperate entrepreneur.  You’re emotional and prone to making mistakes.

Know Your Audience

Under Armour has some of the best marketing in the business.  They market to athletes.  You don’t see them marketing to kids?   The same is true when pitching to an investor.  If you’re building the next Facebook,  you shouldn’t be pitching to investors who only look for opportunities in  clean technology.

Get Their Attention

Now that you know you are speaking to the right investor, how do you get their attention?  Find out what their pain points are.  Find out what keeps them up at night.  Do research on companies they’ve invested in.  How are their portfolio companies performing?  By showing that you are keenly aware of their strategies, you’re showing them that you are taking this seriously and are not just wildly pitching to investors.

Simplicity Wins  

As you pitch, use everyday concepts that are easy to understand in explaining what you do.  Relate your achievements to what people encounter on a daily basis.  There’s a reason Steve Jobs was a master marketer.  He kept things simple!  Most importantly, how does your innovation address an existing need?

Next Steps

Raising financing is a long and difficult process and requires very thick skin.  You will undoubtedly hear more no’s than you do yes’s.  One of the hardest things to do as an entrepreneur is to get someone to buy in to your dream.  No matter how great your idea and your elevator pitch was, make sure you grab a card and follow up.  Ask for a follow up meeting and have your slide deck ready just in case.

A lot of times investors are investing in who you are.  Show them what kind of entrepreneur and business partner they are investing in.  At the end of the day, investors will want some sort of return on their investment.  So be prepared to answer the questions about how you will make money and what your exit strategy is.