Use the few seconds you have to capture someone’s attention wisely.
Five years ago, I went to pay my bill at a local Chinese buffet. At the cash register, a polite young entrepreneur named Matt Williams (founder of LavCup.com) approached me and delivered one of the most effective 60-second pitches I’ve ever heard.
Matt started his pitch by quickly establishing rapport. In the first 10 seconds Matt connected the dots that we both graduated from Villanova University. He was a huge fan of an interview I did on PBS (he had watched it five times) that inspired him to take action as an entrepreneur. He told me that my background in marketing and law might be able to help him commercialize one of his inventions.
He proceeded by defining the problem and its scope: at restaurants, bars and sports venues around the world, people who carry drinks have no place to put their beverages when they use the public restrooms. Matt presented his solution: a patented drink holder and shelf that was a slip proof and sanitary place to put drinks. He elaborated by explaining his revenue model; he had designed the drink holder so that advertisements could be strategically placed above or below the cup holder. He concluded with a compliment and the “ask,” stating that with my unparalleled entrepreneurial successes, I was uniquely positioned to help him take his business to the next level.
- His 60-second pitch had all the right ingredients:
- He connected with me immediately and grabbed my attention.
- He outlined the problem.
- He offered a solution.
- He explained the business model in simple, understandable terms.
- He asked for what he needed to get to the next level.
The end result? I became his advisor and his investor, helping him raise an initial round of seed capital totaling more than $250,000. LavCup.com is now partnered with more than 150 sporting and entertainment venues in the U.S. and Canada.
Deconstructing The Ultimate Pitch
Matt’s pitch was what I would call the ultimate pitch. The reality is that most investors see many more deals than they invest in. Using the ultimate pitch will help you save time and grab an investor’s attention. Your first pitch is likely to be virtual and in the form of a PowerPoint. The key is to keep it simple (no more than 10-15 slides), tell a great, engaging story and hit on the key questions every investor wants answered:
- What is the problem and how does your product solve it?
- How will you bring your product to market?
- What is your business model (i.e. how will the product make money)?
- What is the potential of the market and how do you plan to grow the business?
- What’s in it for them?
In order to answer those questions, you need to be clear about all of the following:
Your vision: What do you do? How do you do it? Why do you do it?
The problem: Tell a personal story that defines the problem that your product solves. What does your product do? Why does the market care?
The solution: Discuss why your product is the solution and what sets it apart from anything else in the marketplace.
Your track record: Share growth statistics, including notable client wins, milestones met to date and total number of customers.
Your business model: Detail how you plan to make money. Keep it simple and be specific.
The growth plan: Show how you plan to grow by leaps and bounds and how you will position your product for market dominance. Use sales and growth data (real and projected) to show why your startup is like a coiled spring ready to pop.
Your team: Talk about your top-notch team and why they’re uniquely positioned to address the problem your product solves, while building a large, disruptive business.
Your investment needs: Expound on what you need in detail. How much money do you want to raise? How exactly will you use it? If you’ve already raised some capital or have notable investors and advisors, explain who invested, what they invested (money, time, advice), why they got on board, and how you’re using their money (or expertise).
Avoiding Common Mistakes
The ultimate pitch is a successful pitch. Pitches fail when entrepreneurs fail to communicate quickly and effectively with potential investors. Here are some of the classic mistakes:
Poor explanation of the problem. One of the most common mistakes is focusing on the solution rather than the problem. If you don’t know or can’t fully explain what the problem is, your solution will come off as less compelling.
Ignorance about your competition. Investors need to know what differentiates your company or service from other companies solving the same problem.
An underdeveloped investment plan. Investors want to know (and have a right to know) how you plan to spend their money and exactly how their capital investment will grow the company.
The Biggest Stumbling Block
But the biggest mistake of all is failure to close the sale—failure to ask for what you want. Every great pitch must end with the “ask.” When your pitch articulates the problem, offers the solution, reveals a detailed business plan, explains your competitive difference, unveils a growth plan and explains how you plan to use their money or expertise, you are ready. The “ask” is how you finish the pitch and close the sale.
Done correctly, the ultimate pitch can make all the difference in the world. Answer all your investors’ key questions and make sure to include the “ask.” If constructed correctly, your pitch will be your express train to success.
The Young Entrepreneur Council (YEC) is an invite-only organization comprised of the world’s most promising young entrepreneurs. In partnership with Citi, YEC recently launched BusinessCollective, a free virtual mentorship program that helps millions of entrepreneurs start and grow businesses.
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