Pitching your startup business is a skill that you must master if you hope to recruit a team, form an advisory board, and raise capital. Startup Commons’ business plan tool encourages you to create a 3-5 minute pitch for your business. This post will offer you guidance on how to best craft your business pitch to effectively sell people on your startup vision.
Start With Why (Problem Statement)
Simon Sinek’s best-selling book, Start With Why, explains how leaders can inspire people to take action. When you are selling people on your vision, according to Sinek, you should proceed from why, to how, to what. It is important to convey your “why” so that people understand your reason for pursuing your vision. Sinek’s advice implies that you should start with the problem when you are pitching your business.
You should open your presentation with the problem you are working to solve and explain why it matters. A combination of storytelling and statistics can help you appeal to both emotional and logical audience members, which will effectively draw them into your pitch. For example, if you are creating a business that charges cell phones in the wake of natural disasters, you could start with a story of a family that struggles to contact relief agencies after their home has been destroyed and communications lines cut after Hurricane Harvey. Adding statistics, you could also explain how the Atlantic hurricane season caused roughly a thousand deaths with damage costs exceeding $350 billion.
Personal stories may possess even greater impact. If your family was the one in the hurricane, then you may invoke a more empathetic response from your audience. That being said, you should also use to statistics to ensure that your problem statement holds up to rigorous analysis.
Stick With One Sentence (Value Proposition)
When you are making your value proposition, you need to be concise. Try to convey what your company does in one sentence. For example, you can say, “We sell (product) to (customer), which produces (type of value) for (customer).” Remember, most laypeople will be unfamiliar with the intricacies of your business model, unless they are experts in your industry. It is important that you give people something they can understand because no one wants to invest in a company that he or she cannot comprehend.
Expand On Operations (How We Work)
Once you have drawn people in with your persuasive problem statement and concise value proposition, you should go into greater detail about how your company operates. This can be an explanation of your supply and distribution chains if you are selling a product, or it can be a high-level overview of how your software functions. Although you do not want to give away the secret sauce, you should give your audience enough information to grasp your operating model and your product’s value.
Captivate With Market Capture (Target Market)
As part of your business planning, you will need to identify your target market and calculate how much of it you can capture. Creating target-customer profiles and acquiring hard data on your market size play an essential role in crafting your marketing strategy, as well as selling your vision. When you pitch your business, you should start with a description of your target customer and elaborate on how much she will spend on your product individually, as well as collectively.
If you want to demonstrate expansion potential, you may want to highlight a future, as well as a current, market. For example, your current market could be populations hit by natural disasters and your future market could be travelers who want new, convenient ways to charge their phones.
Differentiate Your Business (Competitive Analysis)
What sets you apart from your competitors? As part of your market analysis, you must assess your competition and define your position in the market. Sell your audience on your expertise regarding the competitive landscape, and explain what differentiating factors set your business apart.
If you say that you have no competitors, then your audience will think that you have failed to conduct adequate research. Make sure that you know your market, even if you truly believe you possess monopoly power.
Stay Rooted In Reality (Projections)
In your startup pitch presentation, you need to show that your company has a bright future. This is where projections come into play. The metrics you use are up to you. However, you should probably include customer acquisition, monthly/quarterly revenue, and an impact metric (e.g. jobs created, government savings, or CO2 reductions).
Although you want to show positive growth, keeping your numbers rooted in reality is important. You should use historical data, competitor comparisons, and any other insights you can find to ensure that your growth projections make sense. Furthermore, you do not want to make promises that you cannot keep. Make realistic, persuasive projections.
Don’t Forget To Sell Yourself (Team)
Remember, you are not only selling your product and vision… You are selling yourself. Your audience needs to know who they are dealing with, so describing your team’s background is important. While credentials can be persuasive, you should also discuss your team member’s accomplishments in quantitate terms (e.g. she increased customer retention by 67% at her previous company). Storytelling can also be useful when describing your team, but make sure to keep it short and sweet. If you are using visuals, pictures are a great way to help your audience put names to faces.
The Almighty Ask (What We Need)
Whether you are pitching investors or recruiting team members, you must have a clear, concise ask that is backed up with logical reasoning. Being able to explain what you will do with investment capital and why you need certain people on your team is essential for closing deals. This goes back to starting with why.
According to Dr. Eban Goodstein, there are three things you need to remember when making an ask:
The first two steps are fairly clear, but the last one needs some explaining. After you make your ask, you may be tempted to make excuses or lower your ask. Do not make these mistakes. Instead, just be quiet, and wait for your audience to respond.
Asking is often the most difficult part of a startup pitch. One helpful way to view the ask is to consider yourself generous for granting people the opportunity to participate in your vision. You are not tricking people into investing or working with you. Rather, you are presenting them with a once-in-a-lifetime opportunity.
How To Proceed
Now that you know how to create the standard elements of your startup pitch, feel free to add in other details to spice up your presentation. If you have questions, please reach out to Startup Commons, and we hope that you enjoy using our business plan tool.
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