Wondering how to pitch investors and get funded?
Whether you really need outside funding to make your big vision a reality, or just see how getting funded may speed up your progress and make things easier, how can you master the process of pitching to get the money?
Fundraising Behind The Hype
There is a lot of hype about startup fundraising in the media. It is often made to look incredibly effortless. Their sales pitch is to come up with a couple of slides, an idea, get on a TV show or walk into a venture capital office, and you’ll get millions of dollars and have a billion-dollar company tomorrow. That type of overnight success is often an illusion.
Some have landed great investors and the money they need for their business idea just with a Tweet or cold email or getting on TV. Those cases are still very rare.
In most cases when it comes down to how to pitch investors and get funded, the reality behind that overnight success is a lot of hard work, strategy, great execution, preparation, and still being willing to listen to quite a few no’s before getting that precious yes.
Here’s how to cut through the misinformation and streamline the funding rounds, while delivering great pitches that lead to getting paid.
Targeting The Right Investors
Success is all about starting with targeting the right investors. Focusing on the best fitting investors who are most likely to convert can dramatically streamline the startup fundraising process, make it far less stressful and grueling, and will preserve your credibility in the ecosystem.
So, who are the right investors when thinking about how to pitch investors and get funded?
- Those interested in finding your type of business model
- Those willing to fund startups in your location
- Those excited about funding companies in this industry and sector
- Those focused on providing the type of capital you seek at this stage of business
- Those who share your vision and thesis
- Those whose timelines work in conjunction with yours
Network & Build Relationships
Getting funded is far less commonly just coming up with an ingenious idea and grand projections as it is having established relationships.
Landing large amounts of funding is largely about trust. The individuals facilitating this funding also have to know and like you. This is rarely an overnight thing.
When you follow the case studies of founders who have raised the most money, they have typically done it after having forged and nurtured relationships for months and years.
This may not be encouraging for those who have already rushed to start a business and realize they are two years late on cultivating these types of relationships. However, there is a great hack for this. That is leveraging other people who already have this confidence from investors. Such as friends, family members, professors, other founders, and consultants who can make these introductions for you.
Tailoring Your Pitch
When tackling how to pitch investors and get funded, keep in mind that successful pitching and getting funded isn’t just about creating a fantastic pitch. It’s not a one size fits all thing.
Each investment firm and partner will have their own hot buttons and things which resonate with them. Each will respond to different things and different styles in their own way. A part of your homework is to understand this and be able to adjust to the individuals you are pitching, or the setting you are pitching in.
There may be different parts of your business that resonate with different investors too. Maybe this is a product designed for women. A fact you will highlight when pitching to female investors. It may be a SaaS model, which you will highlight to SaaS focused investment firms. It may be a green or eco-friendly alternative, which may appeal to other investors.
Practice, Practice, Practice
If you don’t feel great at public speaking and presenting yet, then keep practicing. Practice with yourself, with coaches, with friends and family and cofounders. Read or get training on how to become a better speaker. Keep practicing until it is completely natural, and you can do it without your slides.
The Pitch Deck
This is the most critical piece when it comes down to how to pitch investors and get funded. The right pitch deck definitely makes all the difference. It’s not just about the best looking or most detailed pitch deck either. It is about getting the right data in, in the right format and order, and being able to tell a fantastic story. Unfortunately, so many highly intelligent and talented founders completely fail here. It’s almost like taking a test. You have to check the answers that match the investors’ answer key and answer them with the precise words they want to see. Most entrepreneurs haven’t studied for this test at all. Or they’ve been studying the wrong textbook.
Remember that you need to master the story which is what raising money is all about. This is being able to capture the essence of the business in 15 to 20 slides. For a winning deck, take a look at the template created by Silicon Valley legend, Peter Thiel (see it here) that I recently covered. Thiel was the first angel investor in Facebook with a $500K check that turned into more than $1 billion in cash.
Remember to unlock the pitch deck template that is being used by founders around the world to raise millions below.
Once your pitch deck is ready to go is all about understanding how you are sending the presentation to the right investor. In the video below I cover in detail how to send a pitch deck to investors.
You can have a perfect idea, product, team, and a great financial forecast, but still not get funded. You must be able to create a sense of urgency and propel the investor to rapid action. It needs to move from a nice to have investment to a must-have investment. The key to that is often FOMO (the Fear Of Missing Out).
Focus On The Lead Investor
The lead investor in a round is hard to get. Yet, after you land them, it is far easier to land many other investors who will compete to participate in a round. Focus on landing a great lead investor and the rest may just take care of itself.
Build A Brilliant Business
Fundraising can be incredibly distracting and time-consuming. The alternative is to dedicate yourself to simply building a hot business that doesn’t need funding. Then it will organically become a magnet for money.
Hope this piece provided some light to the subject of how to pitch investors and get funded.