I remember the first ever startup pitch contest that I organized in 2013 in Dubai. I invited representatives of six big VCs in the Middle East who were sold a promise to see the dawn of the most innovative financial services. A startup accelerator — the partner of the company at the time — preselected top 10 startups to pitch their ideas at our event.
Those were raw, poorly prepared and very confusing presentations. There were too many details way too early — before investors and myself could actually understand why it’s worth listening to the details.
Last week, five years later, I was listening to fintech and blockchain startups during a pitch competition, and I heard equally horrible pitches. I heard unnecessarily complicated and confusing content, full of sophisticated technical details that were thrown at investors in weird order.
All the pitches I have heard in between during these five years at various fintech and blockchain conferences around the world – New York, Barcelona, London, Hong Kong, LA, Moscow – they have been more or less the same. Take any ICO pitch competition today — most startups pay an incredible price to pitch their ideas from stage, and still they give long, tiring, technical, and irrelevant speeches.
I have done some research and talked to startups, accelerators, and investors to find out if that’s only my perception, or it’s more common.
Here is what I have learned:
- 90% of the startups don’t invest time or money into preparation. They prepare the pitch internally and never get an independent expert’s feedback on whether this pitch can sell their idea and their vision.
- Most startups think their idea is special, unique, genius, and only the selected few can grasp it. Therefore, they don’t care about making it simple, because it’s too complicated and it’s not designed for the average brain anyway.
- Most accelerators admit they don’t focus on communication training. Startups receive very little or no training that would help them sell their ideas to investors and to convince people at conferences and meetups.
- Many investors want one clear sentence that explains the idea. And if they’re interested, they like asking questions themselves. Most startups talk way too much and miss the opportunity to create a dialogue. Both during personal meetings and when pitching on stage.
When you hear so many bad pitches so often, it slowly becomes the new normal. And the investors’ fatigue in 2018, as many have noticed, is partially caused by the fact that the ICO market is highly saturated. However, I believe another important reason is that startups can’t communicate the value of their ideas clearly — neither to institutional investors, nor to the public.
Everyone claims today that THEIR startup will make blockchain technology one step closer to being massively adopted, and yet they fail to explain to the masses how.
If any of these startups succeed in their communication strategies, we wouldn’t be talking about blockchain only in small communities at very specific conferences that are being attended by the very same people every month… Let’s be honest – the masses still have no idea, and blockchain today exists predominantly at conferences designed to profit from startups who pay to pitch and raise money.
And even given this opportunity, many startups totally ignore it and fill their time on stage with meaningless and confusing pitches.
So, what are the startups missing and what are the key ingredients to a great pitch that results in investments?
I have pitched to investors worldwide and I’ve made millions of mistakes. I have also trained teams and business owners to communicate their ideas and values to international partners, clients and investors, and I am sharing what matters most for tangible results.
1. Well-known advice obviously doesn’t work
If I start looking for guidance on how to pitch, all advice revolves around “know your why” and “practice your elevator pitch”.
Everybody knows this, yet everybody’s pitch is boring. Because everyone tries to put too many smart words in one short sentence assuming that the audience will figure it out.
The point is not just to keep it short. The point is to keep it short AND clear.
And I am going to give now a horrible advice — but often “making it clear” means spending extra time and adding more words. Words like “imagine”, “you”, “red”, “Mercedes”, “family”… All the words that people can easily imagine and relate to. Phrases like “Computational platform”, “disruptive ecosystem”, “decentralized world”, “self-serving analytics”, “digital productivity”, “microservice architecture”, etc … are damn hard for a human brain to imagine.
And now think about the brain that has been listening to pitches all day non-stop … These words are smart (and many think they are self-explanatory), but they don’t mean what you think they mean to everyone. They have become buzzwords and need explanation. It makes no sense to practice your pitch until you figure out how to avoid buzzwords and tell your story with simple words that everyone can relate to. Such messages will truly stand out.
A message full of technical words will most likely be immediately forgotten. And if you need another convincing reason — remember that many investors today are very international, and English is not always their first language. The more complicated your talk is, the easier you lose their attention. When people don’t understand, they instinctively drift away because no one likes to feel stupid.
2. The goal of your pitch is not to hear “I am investing half a million, please take my money!” from the audience right after your finish talking. Your goal is to make sure people remember your idea.
Because if people remember your idea, they can tell it to someone else. A person in the room might not be the investor (and again, let’s be realistic, big whales rarely make it to the pitch competitions and big conferences), but they might know investors or work for big investors. Make your messages memorable so that people can spread them. People can only remember what they understand. And they easily understand what they can imagine. Many startups focus exclusively on messages like “We are amazing” and “You should invest now”, which makes them sound needy rather than inspired by their own ideas. Always focus on clarity, i.e. learn to clearly explain the idea, the value, the market, and the exit strategy. And practice giving a clear answer to “Why did you start this business?”.
Also read: How to write a PR pitch for your white paper
3. Practice differently. Most people think that “practicing” equals “memorizing” your pitch. This is totally wrong.
When you’re telling me the text you’ve memorized you sound like you’re reading it, and the worst pitch you can imagine is the one that people read on stage, or when people sound as if they are reading. This is an easy strategy to be awarded the nomination “Most boring and annoying speaker ever”. Practicing means getting high quality feedback and improving.
Don’t practice with someone from your team. These people are biased.
They know more about your product than investors who will see you for the first time in their lives. Get feedback from mentors who know what investors want and perfect your pitch until it becomes clear and until you learn to be confident with yourself pitching your business. That’s another big reason why startups get rejected. They beg for money, they say “thank you for your time” hundred times in one meeting, and they can’t own the room. Get a badass mentor or a coach who will help you sound more confident, especially if English is your second language.
Good feedback also helps you restructure your message. I have seen enough cases when startups had to make a pivot. What they considered “innovation” did not get investors’ interest. And what they considered unimportant was suddenly what investors were looking for.
4. People respond to energy, not to words
Learn to master your voice, learn to make pauses, learn to be loud enough. You don’t need to be acting, you simply need to feel comfortable talking to people both from stage and face to face. It’s horrible to admit but most startups think a pitch is a monologue. No, it’s a conversation. You’re not simply delivering a text you’ve memorized, you’re building the connection with people right now. You must know how to get their attention, how to hold it, and how to make them remember your big idea.
Practicing the delivery of your talk is extremely important. Every good leader I know is a good public speaker. Every pitch that is done by a CTO is always a disaster (at least in my experience). A CTO might be the most knowledgeable person in the team, but with zero communication skills. It’s simply not their job, and it makes more sense to train a person on the team whose job is all about communication.
5. Don’t be afraid to sell
It’s quite amusing to watch how startups at the fundraising stage are disgusted at the idea of selling anything and how they sound almost apologizing for asking for money. A startup must be able to masterfully sell their idea to both their clients and investors. I don’t mean “manipulate” when I say “sell”. A good sales result to me is when people recognize the value and approach you saying they need what you have NOW. And NOT when you push them to make a purchase. If you can’t sell you can’t inspire people. And if this is a case, hire someone who can.
6. Don’t be afraid to repeat yourself
Important ideas need to be repeated if you want people to remember them. Experience shows that people actually start paying attention and get the importance of the message after they hear it more than three times.
Also read: Pro pitch deck tips for beginners
7. Learn to answer questions. Learn to prepare for unexpected or “stupid” (as you may think) questions.
I remember being the only woman in the room and asking a question about the relevance of the presented technology. The presenter suggested that mobile apps are dying out and no one uses or needs them any more. I asked whether this claim is backed by any research and where this assumption comes from. I received a very aggressive answer that sounded more or less like “Girl, you have no idea and you’ll never be able to grasp it, so don’t waste my time.”
Investors invest in people, not in their ideas. Ideas are worth nothing if there are no people who can bring them to life. People who are unable to communicate can’t build relationships. And business is all about people building strong, long-lasting relationships with their clients, partners, and investors.
Some investors also taught me a very good lesson. Before making a decision to invest in a certain company they like spending a few days with the team. They take part in their brainstorming sessions, have lunch with them, go to meetings with them, and watch them from the distance. They watch how they communicate: both internally and externally. It’s the one criterion that you can’t demonstrate on your website. You can only feel it once you’re there. Investors make a positive decision if they’re inspired by working with you, i.e. if your communication results in meeting deadlines and building a great community.
8. Don’t mention local complications to investors who look for global opportunities
I was recently listening to a Dutch company pitching their solution, and they spoke about a very local financing problem in the Netherlands. None of what they said was relevant to me (I have never lived in this county) and to investors, who were from Switzerland and China (and were expecting global fintech innovations). Irrelevant information immediately blocks our perception, and people are simply not listening anymore, even if they are still looking at you.
9. Remember that your goal is not to receive a commitment from an investor right now, right after your pitch. Your goal is to get a private meeting.
Just like with the first job interview. You goal is not to get a job offer, but to get a second interview. Building relationships takes time and you need to first invest your energy in this relationship. Always talk about exit strategies. So many startups are obsessed with the numbers they want to raise that they forget about investors’ needs and expectations.
These are the most overlooked aspects of pitching to investors or clients. I honestly believe startups need more communication training. In the era of fast approaching automation and smart technologies, we are losing the talent to communicate.
And pitching is communication. Pitching is a conversation. Make it enjoyable.
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