The startup world is alive and bustling with entrepreneurs, investors, accelerators and a growing network of support industries. The Startup Economy study undertaken by PwC and commissioned by Google highlights that with the right support and growth, this could contribute over $100 billion to GDP and create over half a million new jobs by 2033.
One of the key pillars supporting this growth is a robust network of angel and early investors willing to take risks and empower big ideas. As KPMG noted recently, unlocking the pathways to angel investors in Australia is key to fostering a vibrant startup ecosystem in Australia.
Concurrently, both pitching opportunities and the number of pitches are growing exponentially. As an individual investor focusing primarily on women entrepreneurs, I get over 300 ideas pitched to me each year. Other, more broad-based entities get over 600 ideas presented. Hitting the right pitch note is therefore crucial – and often very daunting.
Here are a few tips based on my experience.
The art of storytelling
Storytelling is at the heart of every good pitch. Entrepreneurs should paint a picture of the landscape and take potential investors on a journey of the change.
Too often, people get caught up in the technicalities of the business and numbers, forgetting to create a sense of excitement for us. Investors are people. And we, much like everyone else, love a good story – especially one that we can be part of.
Perfecting the length
I see a good pitch for funding as an extension of the traditional elevator pitch – a delicate balance between brevity and detail. If you can get my attention in 10 – 15 minutes or less, it’s a job well done. If I want more details on the points you’ve raised, I’ll ask after the pitch. Entrepreneurs should leave investors wanting for more rather than overloading them with information.
Most people are visual beings and like seeing images and videos in a pitch. It is widely noted that people usually remember 10% of information delivered verbally. Including a picture increases their retention to 65%. While charts and graphs are important and we do need to see them, presentations can be broken up visually.
Only use visuals to link back to the story. It should be done well and with relevance or not at all. It’s all about balance.
I invest in people just as much as their businesses. While entrusting my money on an idea that hasn’t had proven market success as yet, I look to the personality of the entrepreneur to see if they have the ability to scale the startup to growth.
Personality traits such as a natural curiosity, agility, resilience and creative thinking are important to investors. For example, Springboard, the hub for investors and innovators, looks for members who can thrive in ambiguity and change, have agility, curiosity and emotional intelligence.
There is no set pattern as to what should take precedence in a pitch. It should be whatever is most relevant to the business and its growth. If marketing is important, then it should be given due importance, and likewise- revenue or technology. Don’t try to fit everything in just because you have to.
Pitch deck considerations
Beyond the obvious areas such as market overview, business plan, growth and exit strategies, other important elements to consider are:
- Competition – Investors often hear the sentence “there is no competition for our product / service”. While a competitive product or service might not exist in its current shape, competition could stem from consumer adoption challenges, resistance to change in a legacy-based environment, outsourced models, battle for share of wallet, etc.
- Succession plan and team dynamics – While the founder is the heart of the business, I want to know what happens if they step out. I also look at how well partners and teams work together.
- Strong financial model: One of the common challenges we face in Australia is the startup’s ability to scale after reaching a certain growth point. I noticed that in the US, startups scaled and grew their businesses much quicker. Although this phase typically involves the next round of funding (Series A, B or venture capital), I look for startups with sound scaling strategies that can sustain the growth momentum. Those entrepreneurs that, after a certain point, can convert their startup to a successful business and corporatise it.
Ultimately for me, it is the founder and their commitment and passion to the business that nails the pitch. How this is presented and is ultimately brought to life is the key selling point.
About the author:
Renata Cooper is the founder of Forming Circles Global, a unique angel investment and mentoring organisation that predominantly invests in female-led technology startups. Renata Cooper primarily invests in women founded / led technology startups and her portfolio includes US-based CloudPeeps and StorReduce, Australia-based iVvy, Our Little Foxes, Workible, Good360 and Handkrafted.