A guide on how to best approach pitching your project to the people who can take it to the next level.
By Jacqueline Patton
You’ve been working on a great idea for a while and now the time has come to pitch it to an investor. Trouble is you don’t know how to do it or where to start. Fear not! We have compiled an easy how-to-guide that breaks the challenge into four simple steps.
Know Who You’re Pitching To
Let’s suppose you have proactively approached the investors you think would be interested in your project, based on their history and previous investments. Perhaps, you’ve landed an investor opportunity through a random encounter or a personal connection. Regardless of how you got there, do your homework and learn everything you can about your investor audience. If any trust-based relationship is to be built – which is crucial for an investment agreement – you’ll need to be able to successfully describe how their interests and goals align with yours.
Ask yourself: Where can I find more information about my investor audience? Do I have any common interests, hobbies, communities, and experiences with them? How do I link my idea to their interests?
Make It Emotional
You may be surprised to hear that people don’t make decisions rationally – quite the contrary! Research in neuroscience shows that people make decisions based on their emotions and then use their rational mind to justify the decisions they have made. It’s very important for your investor audience to have an emotional connection with your project before they can commit to supporting it.
Start by sharing why you’re doing what you’re doing, rather than directly going into what you’re doing and how you’re doing it. In his popular TED talk, “How Great Leaders Inspire Action”, Simon Sinek explains that in order for you to inspire others, you must start by stating your purpose – what you believe in – the “Why”. Only after explaining your “Why” should you explain “What” your project is and “How” you can make it a reality. It’s a marketing recipe for success that groundbreaking individuals and organisations continually use.
Ask Yourself: Am I clear about my project’s purpose? If not,find your “Why” here.
Personalise Your Story
Your investor will need to understand how your project’s purpose is related to your own story.
This is where it gets personal. Investors don’t invest in projects; they invest in people. Every experienced investor knows that it’s the people behind the project that make it a success and they are more willing to bet on an ‘A Team’ with a ‘B project’ than on a ‘B Team’ with an ‘A Project’ any day. An investor needs to trust that you have what it takes to be successful.
Think about your life so far and how your personality, experiences, interests, and motives have shaped your actions. There’s got to be a link between who you are and the purpose of your project. Find it and make sure you share that story. If it’s authentic, it will engage the listener and synchronise their brain with yours, something psychologists call ‘neural coupling’. The listener’s brain begins to produce oxytocin – a chemical that increases trust, generosity, and compassion – just what you need to gain the support you’re after!
Ask Yourself: Am I telling a good story?
Show You’re Grounded
Investors know that a great idea wouldn’t go far without having grounded people behind it. They need to believe you’re someone who has integrity, is open to learning and continuously improving, and is truly committed to making your project a success.
Here are some tips that might help:
- Be prepared. Do your homework before a pitch. If you don’t, your chances will go down substantially. If you do, it means you’re showing serious commitment.
- Create a pitch that clearly describes your purpose, value proposition, business plan, and exit strategy. Then rehearse it again, and again, and again. It doesn’t matter if you know your business plan by heart already; being able to convey it in a concise and clear pitch – under 10 minutes – takes skill and practice. Use your time to practice, not the investors’ time on the day.
- Anticipate challenging questions but don’t be afraid to admit you don’t have all the answers. Rehearse complex scenarios. At the same time, bear in mind that investors aren’t looking for a know-it-all and understand that in the early stages of any business this is impossible. Instead, they want to understand how you respond to challenging questions, and see that you’re able to recognise areas you don’t know while conveying a genuine interest to learn. This persuades an investor that you have what it takes to collaborate and continuously improve. ii
- Walk your audience through the relevant parts of your previous experience: You need to be ready to talk about your previous experience, giving some concrete examples of both the successes and the failures (making sure you highlight what you learnt from them). This shows maturity, honesty, humility and determination.
Regardless of what happens, keep your options open. There are many investors, and you can always take time out to work on your idea, and then pitch it again. Alternative funding sources such as crowdfunding are also something to consider.