How to Pitch an MVP to Investors
Most business owners are well aware that their chances of securing funding are much higher if they have a functioning released product to demonstrate. Even if you're at the earliest stages of startup funding, gone are the days when investors and VCs were giving away cash and greeting aspiring entrepreneurs with open arms. The economic landscape has changed, and not everyone is ready to risk it and support those who only have an idea to share or a crooked product no one is using.
In fact, the startup investment dynamics throughout the past few years keep showing a drastic decline, meaning that far fewer startups obtain sought-after funding. It's a challenge, indeed. And to raise your chances of getting funds you have to be prepared and know how to get your MVP pitch right.
What do investors care about most? And what should you do to present your minimum viable product in the most convincing way to score the investment you're craving? On this page, we'll dive into some tips and tricks for pitching an MVP to investors.
First Comes the Minimum Viable Product
Investors and VCs care about proven traction. They want to see a working product that already has a user base and, even better so, one that has managed to win its first paying clients.
Investors take special interest in evidence proving that your product has what it takes to scale, bring them a return on investment, and keep waterfalling profit in the long run. They need to see your project as an opportunity to grasp.
Hence, if you're just at the ideation stage, have a barebone tech startup idea in mind, and decide to pitch without MVP backup, chances are high that you won't be taken seriously. Or, as a more realistic outcome, you'll be ignored altogether at the initial screening phase.
While your sparkling enthusiasm and plans regarding the product's bright future could be grand, if these plans are elusive, investors will hit the invisible "Thank you, next" button. Your statements have to be based on tangible information, which translates to investor language as "proof, numbers, and data".
So, how do you demonstrate that you're the real deal worth consideration? To begin, you can't come forward with a bunch of product hypotheses and guesses. You must have all your research and analytics in place. This also means your proof of concept should be successfully completed and that all your statements are backed by facts and findings. And, yes, you need a released version of the product, too.
As we've said, an MVP pitch is hard work. And to get a better shot at it, you need to cope with a few very big steps prior to the pitch. It's a steep climb up, as one of the biggest steps is launching an MVP.
An MVP isn't something full-scale or functionally rich. Although simple in terms of feature set, a minimum viable product is an early product version that delivers exactly what users need to solve the problem in focus. The whole aim of such gradual development is to test the waters and actually see whether people are willing to buy it and if the project is worth further effort.
Moreover, an MVP allows you to start collecting real user data. In an auspicious scenario, you might even manage to get your first paying clients. And yes, user feedback, data, and incoming payments for the MVP are "checkboxes" that investors seek when reviewing early-stage startups. But how do you pitch your MVP to investors?
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MVP Pitch Deck
A deck is a visual aid to back up your presentation. These ten to twelve slides should summarize what you're talking about and have just enough information to highlight the very essence of each major takeaway.
A pitch deck is prepared in advance. It has to be consistent, simple, yet visually appealing. What's for the content, have you done your homework thoroughly?
Share your findings, but only realistic things, the ones that really count. Yes, you're only at the MVP stage of the product development life cycle and probably don't have as much data and metrics to fall back on as an established product would. But investors sense vanity metrics and other fluff that only looks good but is meaningless (and they never buy into it). So keep this point in mind when crafting your pitch MVP deck, as this is another key to how to pitch a product to investors and succeed.
What should you include in your MVP pitch deck slides? Your team and project have to make a great first impression, and you definitely want to come across as a reliable potential partner. You need a solid explanation of:
- who you are (your professional background, why you're an expert in the field);
- which problem you're solving (and why it can be thought of as a problem in the first place);
- who has this problem (your target audience and how you know about their needs and pain points);
- how large the potential market is (i.e., market demand and your total addressable market);
- who the competitors are (an analysis of analogous existing solutions);
- which solution you're offering (your value proposition, vision, and goals, why your solution is unique, best, optimal, and, preferably, you should be able to demonstrate the MVP upon request);
- your product's traction (product performance metrics, number of acquired users, how much profit the product is already generating, and so on);
- your financial calculations (detailed calculations regarding how much money you need, what you plan to spend it on, profit potential, how soon you expect to get ROI, and so on).
Take the time to polish the deck, remove excessive things from the slides, and use easy-to-understand language.
Secrets of an Effective MVP Pitch to Investors
Now let's move on to finding out how to pitch a minimum viable product. Remember that you'll have limited time for pitching MVP essentials and your business idea. Therefore, if you plan to succeed in your startup fundraising attempt, you need to be fully equipped to make an impression that lasts.
If investors get interested, they'll contact you for another meet-up to discuss some in-depth technical or business matters and maybe request additional documentation or information. But at this point, 20 to 30 minutes is all you've got. So, don't waste your potential investor's time. Here are a few things you should do.
Prepare for the MVP Pitch
Don't make investors take your word for it. In-depth market research is a non-negotiable must-have for your MVP pitch deck. You've guessed it right: numbers, proof, and data are gold. Hence, you can add a few key industry-related findings, curious statistics, or other relevant information to endorse your statements.
Elaborate on the key messages you want to get across. Why are you sure the idea is feasible and has a bright future? Why is your solution the best one from the technical standpoint or the market point of view? How can you prove that the product has potential for scaling and growth?
There has to be a balance, either way. You should show your passion for what you're creating and not bore your audience with raw numbers and confusing graphs. So, practice your presentation and try to prepare to answer possible questions, including the tough ones like possible risks or challenging areas.
Be Ready to Provide Rationale
Even if your product has a great MVP design and is receiving traction, you can be asked to give an explanation regarding some of your decisions, describe how you calculated specific projections, or how you obtained your metrics and data. Here are a few examples.
As such, you might want to be ready to explain your feature prioritization choices. Why is this specific set in the spotlight? Here's a simple tip from Upsilon's CTO, Andrew Fan, regarding this:
"You can state that you fall back on the approaches lined out in "The Mom Test" when handling your custdev processes. This book by Rob Fitzpatrick is a desk reference for many startup founders and provides many valuable tips on how to get better insights on real customer preferences."
Either way, you should be prepared to present arguments in favor of your choices and to clear up why you're moving in a set direction. Interviews, surveys, client feedback, and metrics proving traction: all of these can be used as early signs of product-market fit, as they are somewhat lighthouses guiding your business decisions and helping you prove that your MVP is the next big thing glowing with potential.
Present Your Team's Expertise When Pitching MVPs
Team expertise really matters. While startups might not pitch MVP projects all the time, investors screen dozens on a regular basis. And one of the points they evaluate is the team's skills, background, experience, cultural fit, values, and so on. They want to see that you have reliable professionals onboard, not just a bunch of enthusiastic people who are trying to launch a startup and become millionaires.
The thing is that investors tend to choose in favor of teams that strike a balance. When it's clear who is responsible for the business side of the product and who's in charge of the tech, this is a beneficial point. Investors generally give preference to those who have this credibility when considering new partnerships, even if the startup team structure isn't too branched yet, and the team is small.
If you have advisors, partners, or notable figures helping you, it is worth mentioning them too. Support right at early MVP stages from reputable people can also be a positive signal for investors.
Make Sure Your CTO or Technical Co-Founder Tag Along
If you're building an AI app that's knowledge-intensive or some complicated, technically-savvy product, expect to be asked about the tech side while pitching your MVP. It is recommended that your technical co-founder or chief technology officer is present during the MVP pitch to answer questions and clearly illustrate what is behind your product.
As such, you might need to give reasons for why you chose particular third-party apps for integration when building your MVP instead of coding such features in-house. Frankly, it is a common practice to develop a minimum viable product the following way: you create the unique parts of your MVP or its core technology from scratch and then link up ready-made solutions by trustworthy big names to save time on reinventing the wheel. For instance, Auth0 is great for user authorization and Twilio is a lifesaver for send-outs, you don't need to code this stuff from the ground up unless it's your product's core functionality. However, you should be able to give arguments explaining your startup's tech stack choice and other decisions.
If you're a non-techy founder, finding a CTO for a startup might be really challenging. But it is best to work this matter out even before you start to develop a minimum viable product. Why? Well, the product's tech foundation, basic functionality, and other groundwork are taken care of early on and it's wise to get it right from the outset to avoid "duct tape" and do-overs.
As an alternative, non-technical startup founders opt for outsourced CTO services. They get the needed consultations from a borrowed professional and can even obtain an entire team to bring the product to life, which is an awesome solution if you don't have your own developers, designers, and so on.
Don't Forget to Follow Up After the MVP Pitch
Your MVP pitching isn't finished after your presentation is over. This doesn't mean that you have to pile your investors with updates, but you can remind them about yourself from time to time to help them reach a decision about discussing the project further, shaking hands, and offering you funding. Share your digital business card with them to share more details about your brand and work portfolio.
If things go well, you might be requested to dwell on your product development roadmap. You can demonstrate your current progress and share some plans regarding which features you have in the queue for development and what you'd like to release in the upcoming milestones.
Similarly, investors might ask you to share some documentation for assessment, for instance, to be sure that your startup has well-managed paperwork from a legal perspective. Or you may be asked to undergo technical due diligence to check what's under the "hood" of your MVP. The latter health check is integral, as it is important to confirm that the MVP is well-built, capable of scaling, and doesn't need reconstruction.
Need help with MVP development?
Upsilon will be glad to share our expertise with you, help you build your product, and be with you all the way through.
Summing Up How to Pitch Your Minimum Viable Product
As you see, a pitch for an MVP has to be well-prepared. Your data must be in place, you should be ready to give answers to the tough questions, be confident, inspiring, and memorable. If you play your cards right, you will be able to convince investors that your project has potential.
They care about profitability, so if your pitched MVP that currently has just core functionality demonstrates that the product has traction, can scale, grow, and bring back cash, your chances of securing funding are higher. Bottom line: a decent MVP is worth a lot more than words.
If you need a hand with creating a minimum viable product, Upsilon has been providing MVP development services for startups for over a decade, and a few of our own successful products have started out as MVPs as well. We can help you all the way from the discovery phase (to select the tech stack, handle the design, integrate an analytics platform so your MVP collects metrics early on, and so on). You can also count on our support during an MVP pitch if you need one of our technical experts to tag along to your talk with investors and explain the technical side of what we're building. So, feel free to reach out to us to discuss your needs!
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