How to Pitch Your Startup to Attract Money
EDITOR'S NOTE: This is an excerpt from Littman and Camp's new book, "The Entrepreneur's Faces: How Makers, Visionaries and Outsiders Succeed." This article is part of America's Entrepreneurs, a Next Avenue initiative made possible by EIX and the Richard M. Schulze Family Foundation.
Entrepreneurship is being driven by massive layoffs and the realization by savvy business people and mature corporate veterans that the crisis also offers opportunities. Nimble startups and new ventures are seizing upon once-in-a-generation changes in trends and consumer habits with extraordinary potential.
The Strengths of Older Entrepreneurs
As authors of the new book on successful startups, "The Entrepreneur's Faces," we've found that the need for social distancing has shifted pitches to Zoom, a great democratizer for entrepreneurs of all ages. So, it's easier than ever to get an audience for your pitch, if you're looking for money.
The wave of digital pitching has been fruitful for older and younger founders alike, first-timers and serial entrepreneurs. But founders in their fifties and sixties often bring extra talents: the ability to extensively research and prepare and the maturity to understand that pitching is about building a relationship.
Rules for Successful Pitches
The key to a successful pitch these days is to follow a few simple rules:
Be transparent about your purpose
Don't play a bait and switch game (like asking a prospective funder to connect on LinkedIn and then later hitting up the person with a pitch). The first outreach on LinkedIn is simply to see if the person or his or her institution might be interested in a one- to two-page overview of your startup or a mini-teaser slide deck.
Know who you are pitching
Remarkably, most founders fly blind. "A lot of founders don't do any homework. They don't know anything about the investors they're meeting. What they've published or said online," says Nuno Gonçalves Pedro, founder and managing partner of Strive Capital venture fund. Preparation enables you to target what a lender or investor cares most about, and forges an immediate, emotional connection in those first, awkward moments.
Set yourself up to deliver a winning video pitch
Decent lighting is key. Invest in an inexpensive ring light to light your face evenly. Also, raise your computer to face level. Make sure you have a professional office background, too. Zoom is easy to use, and sports higher quality video than Google Meet or Microsoft Teams.
During your presentation, be ready to switch from your slide deck to launch a demo or to share documents.
"Be crisp about the pitch," says Gonçalves Pedro, emphasizing that it's tough to deliver a slide deck in 30 minutes that conveys: (1) the big problem; (2) how you solve it; (3) the size of the market, including the competition; (4) your winning team (if you have one) and (5) how much money you need.
There's also the intangible. Risto Lähdesmäki, founder of the UX design firm Idean and an angel investor (someone who provides capital for a startup), closely gauges a founder's energy and character. "The ones that stand out, you go, like, 'Wow, this is the highest grade,'" says Lähdesmäki.
Believe in yourself to tell a convincing story and make an emotional connection
Three years ago, researching our book at the Web Summit in Lisbon, Portugal, we saw dozens of unmemorable pitches, then stumbled on a middle-aged guy with a crimson scarf and yellow boots: Uwe Diegel.
His brother had nearly died when his hotel accidentally froze his insulin. So, after doing some research, Diegel discovered that most of the top-selling medications require refrigeration. "These people are basically prisoners of their medications," he said.
He closed in on a solution to this problem: "LifeinaBox is the world's smallest fridge. You can put up to one month's worth of medication inside," he explained in his pitch. "Why connect the fridge to an application? It will monitor the temperature… …set your reminders."
Then, Diegel closed dramatically: "LifeinaBox is not just a fridge. LifeinaBox is a tool for the heart. It is freedom. Freedom for people to travel. Knowing that their medication is at exactly the right temperature, anytime, anyplace."
Diegel nailed his pitch again in the final round of the competition. His slides had been visual and evocative, and his story swept the crowd. Seconds later, the audience handed Uwe a whopping 72% of the vote. The head of the jury called out, "The winner is LifeinaBox!"
The irrepressible 52-year-old beat out a thousand younger contenders for the $60,000 grand prize, proving that far from age, the right concept, story and mojo are the keys to a winning startup pitch.
Diegel went on to land a manufacturer to bring his product to market in the U.S., Europe and Asia and to win a prestigious Innovation Award at the 2019 Computer Electronics Show in Las Vegas.
Today, he's well into his second and third line of medtech refrigeration products and still winning hearts with his gift for storytelling.
Like the other nine remarkable startup founders profiled in our book, Diegel can pitch as if his life depended on it. If you want to pitch your business to attract financing, you need to do so, too.