How exactly to Pitch Investors: Four Tips from TechStars NY

If you wish to impress investors, you can grab some pointers from the participants in this hot business-accelerator program.

Imagine it show Shark Tank if 11 promising contestants were chosen from 600, received shared office space or more to 10 mentors apiece, and told to go their companies as fast and far because they could in 90 days. Along the way, these were given the chance to rehearse their business pitch again and again, with feedback from accomplished investors and entrepreneurs. Towards the end of the 90 days, 11 contestants were invited to stand on the stage of a big music hall and make eight-minute pitches to an audience of 750 angels and venture capitalists, rather than a hard-to-please panel of four.

This, the bottom line is, is TechStars, a tech-company accelerator program that were only available in Boulder, Colo., recently expanded to other cities including NY, and has a lower acceptance rate than Harvard.

To make an impression on hard-to-impress investors, entrepreneurs need solid business ideas and killer presentations. At the recent TechStars event in NY, Entrepreneur.com watched the presentations, talked to the participants and took notes. Some tips about what we learned about why is a presentation knock investors’ socks off and, more important, open their wallets.

1. Be polished. It had been obvious to venture-capital investor Geoff Schneider that the presenters at TechStars have been "coached." But he didn’t care, since it made his job as a prospective investor easier.

He wants entrepreneurs to answer five basic questions:

  1. What problem does the business solve?
  2. How does it make money?
  3. What has it accomplished up to now?
  4. Who will be the individuals running the business?
  5. What exactly are they looking for from investors?

The more entrepreneurs practice their pitch before other folks, and the wider variance of feedback they get, the much more likely they are to provide a concise, polished presentation that hits those key notes.

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"You intend to have the ability to communicate those tips in a straightforward, clear way," says Schneider, a managing partner with VC firm Cava Capital in Wilton, Conn. "The true test is: Is it possible to explain what you’re doing to your mom?"

2. Be personable. Caren Maio, a co-founder of a TechStars company, says rehearsing helped her perfect her pitch, but she’d race through parts she knew well.

Remember that the investors you meet are hearing your pitch for the very first time. They need you to be worked up about it plus they are counting on you to have them enthused.

"I had to focus on keeping my energy up through the entire presentation," says Maio, whose company Nestio allows house hunters to get information from multiple-listings sites in a single place.

Watching videos of herself, she discovered that when she got tired, she’d start rattling off tips too quickly.

"It’s painful to view those videos," she says. However they taught her to decelerate and to make a spot of inserting pauses at various points throughout her talk.

3. Be authoritative. "To entrepreneurs, investors can begin to be this vague, generic concept," says Marc Billings, founder of Incubate Miami, an incubator. "It is critical to remember you aren’t speaking with ‘investors,’ you’re speaking with specific people."

Every VC firm and angel investor has its sweet spot. They prefer sectors where they have knowledge, contacts and first-hand experience. Some prefer younger or even more mature companies. A presentation is stronger if a business owner tailors his / her pitch.

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If you have only eight minutes to tell your story, the more specific you could be, and the more regularly you should use numbers to create a point, the stronger it’ll be. For instance, reporting that you save your valuable customers typically $500 per month or five hours weekly is more powerful than saying your product will create significant savings for users.

4. Be coachable. These professional or semi-professional investors pride themselves on "adding value," to the firms they invest in. They would like to know you find attractive their industry knowledge, technical savvy and contacts, not only their money.

Billings notes that many of this program mentors who introduced among the companies "made a spot of saying how receptive these were to feedback." His advice to entrepreneurs who are making an appeal to VCs and angels: "You shouldn’t be the smartest guy in the area."

"We tell the firms early on to ensure to actually require something within their presentation," says David Tisch, managing director of TechStars NY. This means requesting a particular sum of money to perform a specific goal, like expanding into new markets. In addition, it means stating how you would like your investors to assist you.

If the investor can easily see you accomplishing your goal and may get excited at the chance of assisting you do it, your pitch did what it’s likely to.

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