Pitching to Investors: What to Cover and How to Succeed

Turning to investors to raise capital is one way to obtain money to get a startup off the ground or take it to the next level. And as it goes with any presentation, you must be persuasive and engaging enough to catch the audience's attention. But how do you make the presentation memorable and leave a good first impression? What should you do to convince the investors that you're worth it? After all, you might not get a second chance.

On this page, we go over how to pitch to investors and succeed. We share the best practices that founders should make a note of if they want to stand out, succeed with their fundraising initiative, and get money.

How to Approach Investors

First things first, it's vital to determine the investor type that you'd like to pursue (individual investors, angel investors, venture capital firms, and so on). After that, decide on how much funding you need and precisely what your business needs it for.

You can then leverage your professional network and search the web while seeking investors who are currently open to new opportunities. Other paths include attending specialized events or conferences where you can meet investors in person or join startup communities where investors hang out.

When you've shortlisted a few of them, you have to break the ice, get to first base, and introduce yourself. But how exactly do you do that if you plan on pitching investors?

Your aim is to get noticed and book a meeting during which you'll come forward with your presentation for investors. It all starts with the first contact. During the meeting, make sure to take detailed meeting notes to capture key points and investor feedback. And there are a few best practices regarding how to approach investors for funding the right way.

Emails, cold calls, messages on LinkedIn, filling out forms on investor websites, and connecting online are options for reaching out. But, in this case, you have to be prepared that you might be ignored because investors receive hundreds of inquiries. If a mutual contact or another founder who's acquainted with your potential investor can put in a word for you, such a warm introduction raises credibility and can cushion the situation.

Either way, during your initial approach, you have to:

• personalize your message (use information you've researched about the investor as leverage);
• be polite and clear when introducing yourself (after all, you're not only doing this for the money, you're going to build a relationship too);
• make it evident that there's a whole team behind the product;
• confirm that it's a functioning product that already has traction to make the business opportunity more obvious and to sound convincing;
• do your best not to come off as desperate;
• keep your message short, cut out excessive details, stick to the point;
• request a meeting;
• attach an executive summary or overview of what you'll be proposing, possibly along with the pitch deck;
• add a hook that'll urge the investors to reply, get the conversation going, and lead to a scheduled meeting.

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How to Prepare for Pitching to Investors

Think of your pitch to investors as a first date. You'd want to look good and make a great impression, so you should spend some time on preparation. Let's first go over the things you must take care of before "showtime". Here's what you should do during startup pitching to help your audience remember you and appreciate the solution's value.

Craft a Flawless Pitch Deck and Presentation Script

Let's start with the pitch deck. It'll serve you multiple times, i.e., you'll use it during the presentations and send the slides to the investors as a follow-up afterward. Therefore, the content of the deck has to be polished either way.

Supporting materials are always an integral part of any presentation. And if you plan to pitch investors, ensure you've given your slides much thought beforehand. The same applies to planning what you're going to say.

According to recent statistics, venture capital investors (short for VCs) tend to spend much less time looking through pitch decks than previously. On average, they spend 2 minutes and 42 seconds reviewing pitch decks, which is down by almost a quarter in just a year. It's no surprise, really, as investors receive thousands of applications with pitches. And this means that you're fighting against the clock to stand out and convince them.

So, one of the main tips on how to pitch an idea to investors effectively is to take the time to put together a deck that'll cover all the main points and make it simpler to follow what you're presenting. Include the vitals in a concise and easy-to-understand way. Make sure to add key information:

• an introduction to the problem;
• the offered solution;
• a product preview, demo, or short overview; 
• your financials;
• startup equity distribution;
• the business plan;
• market research and well-researched facts;
• competitor analysis;
• gained traction;
• core startup analytics and metrics.

What do investors want? Mind that they care about their return on investment, so your pitch has to be solid regarding your business plan and revenue streams. Not to mention that the pitch deck must make sense on its own without your comments.

There are many more tips and tricks on how to make a good pitch presentation and craft a standout deck (like using PowerPoint slides, pitch deck templates, AI presentation makers, and so on). But here are several fundamentals:

1. Follow a logical structure, have a clean layout with readable text and elements.
2. Think through your strategy presentation, but keep it short (say, 10 to 12 slides that are not crowded with text or packed with complicated visuals, as this is not the right place for fluff, period).
3. Consider using AI to make the slides maker or apply pitch deck slide templates to keep the design concise.

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Modify Your Pitch for Every Audience

It's very likely that you'll present your pitch to investors more than once. And the worst thing you can do is not have an individual approach to various investors. For example, are you turning to angel investors or VCs? Which ones in particular?

These aren't just startup terms, and you have to keep in mind that investors often have their own thesis. That is, they might be interested in funding products that fit particular niches. For instance, if they solely care about the healthcare sector, then most of the presented SaaS ideas from other categories won't make the cut. And in this case, it doesn't really matter how great or revolutionary the solution is.

Pitches more likely to secure funding are the ones that manage to hit the bull's eye and show that "we're a great match". What's this investor's appeal? Bottom line: by researching what the VCs are interested in, their priorities, portfolios, and areas of expertise, you can save yourself and the investors time. Try to find answers to these questions to understand what they're searching for:

• What do they prefer?
• Who did they already fund?
• Are they more inclined toward AI based startup ideas?
• Who are these people as individuals?

Mind that you will likely be restricted to a specific time limit (usually under 30 minutes in total, including the question-answer part). Therefore, not adjusting your pitch presentation and refining the slides based on the audience is among the common startup mistakes not to repeat during pitches.

Practice Your Pitch

Have you ever seen poorly rehearsed shows or plays? Make certain that your investor pitch is nothing like that.

A well-honed program is much easier to perceive than if the presenter forgets his lines, stumbles, goes back and forth from one idea to another, and presents some improvised mess. However, there is a balance to strive for, as a perfectly memorized speech may sound fake and emotionless, which isn't good.

Take the time to practice your speech and presentation out loud while clicking through the slides of your pitch deck for a more consistent performance and to get the feeling that you really own it.

Try Testing the Pitch on a Demo Audience 

Holding several test pitch presentation rounds to non-investors can also be good practice. You'll polish up your speech, gain confidence, get feedback, allocate areas for improvement, and get a better understanding of how to do a pitch presentation.

Did you notice that people get distracted by a slide with a complicated graph? Did they stop listening to you because they were trying to figure out the slide content? Were some parts of your story too confusing? Use this information and your observations to improve the presentation, eliminating any weak points for when you actually pitch investors.

Think Through the Q&A Part

Which questions can come up during your pitch for investment? Most likely, you'll be asked about the potential risks and how you'll approach them. Or what your go-to-market strategy includes (for instance, whether you plan to spread the word about the product by going through a Product Hunt launch). If you're at the later stages of startup development, then you might be asked about your exit strategy plans.

Try to anticipate what people might be thinking and give answers before they even ask. Plus, brush up the answers and prepare them in advance to raise the odds of obtaining sought-after funds. Some startups even ask a Chief Technology Officer to tag along to answer tech questions, but if you don't have your own CTO yet, you can turn to an outsourced CTO for such assistance.

Also, bear in mind that it's not a one-way street. There are plenty of questions to ask investors in first meeting scenarios, such as:

• how involved the investors generally are (e.g., frequency of meetups);
• what is worth knowing about their network and partners;
• their funding range or check size;
• how long their typical timeline is for reaching investment decisions;
• their investment process and how long it takes;
• whether they have concerns about your business or see risks in the proposal;
• whether they have specific expectations (e.g., seats on the board);
• details on specific companies added to their portfolio;
• other questions that truly matter for your business.

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What to Include in Your Investor Pitch

Properly approaching VCs or investors to get funding is a delicate matter, as the majority of applicants get turned down. Do we have to remind you that lacking the required funds is among the fundamental causes affecting the startup failure rate?

And regardless of whether it's an on-stage investor deck presentation on demo day, a one-on-one meeting, or a video call, your presentation must be clear, meaningful, and concise. Here are the "musts" to include and the "dont's" to avoid. Let's learn how to pitch an app idea to investors using a quality deck.

Start the Pitch Explicitly

Your aim is to hook the audience early on as you pitch investors. So, make the statement with the purpose of your product brief. Preferably, limit it to a solid tagline or just one short sentence so it's clear who you are and what you're doing in one glance. This is a proven best practice on how to start a pitch presentation off the right foot.

This half-minute speech should reflect the essence of your product. It's often referred to as the "elevator pitch" (an elevator pitch to investors is what you'd say if you bumped into one in the elevator or in the hall).

Nailing the startup or MVP pitch isn't an easy task. But the tagline should be memorable, straightforward, and catchy, defining your vision and product core. Avoid terms that are too complicated and keep the message short.

Use Storytelling

To make an impression that lasts, the story you pitch to investors has to be memorable. Ideally, your narrative should sound like an engaging story with real and relatable examples and facts that can prove that what you're saying is true.

• Share your journey, how you came up with the tech startup idea, and the reasons why you're devoting so much time and effort to creating this product and launching a startup.
• Describe who the target audience is, which problem it's facing, and why your solution is necessary.
• Briefly explain what you're doing, how your product brings value, how it will make a difference, why the time is now, as well as what it may turn out to be in the long run.
• Bring up examples that people can picture and nod along to.
• Introduce the committed team behind the product and your background.

Being declarative with a story is an approach that can help you stand out and not sound robotic or monotonous. Storytelling could be a helping hand and a trick to how to pitch a business idea to investors. Be careful with jokes, though, as sometimes they end up being inappropriate and lead to the reverse effect.

Indicate Your Competitors

Claiming that your product has no competition during a fundraising pitch will cause suspicion. Thus, make sure you've done your homework and have thoroughly studied which competing solutions are already present on the market.

Mark how your offering is different and how its competitive advantage will lead to startup growth. In the context of financial technology, leveraging AI for capital markets can significantly enhance predictive analytics, risk management, and investment strategies, giving your startup a competitive edge. Explain what makes it better at solving the problem than any of the closest competitors based on your in-depth analysis of the main players and the industry.

Emphasize and Explain the Figures

While who you are, what, and why you're building really matters, the specific numbers behind it matter more during an investor pitch. Whether you're just getting traction or aiming at startup scaling, your chances of getting rejected can snowball faster than you think if you don't have:

• realistic projections and forecasts;
• grounded estimates;
• a doable financial plan;
• meaningful user, competitor, and market research;
• figures on market potential;
• facts to verify you're the real deal.

What are the impactful statistics and findings that matter? What's the market size and bottom-up total addressable market (TAM)? Which of your metrics and numbers can demonstrate the solution's potential? Transparency and truthfulness are essential in this respect, and precise numbers and tangible data are what makes a good pitch.

To be taken seriously, you need to have a track record and show proof of traction. As such, give a sneak peek at the revenue you've made, how many active users are already enjoying the product, your realistic startup valuation, or any other vitals worth sharing. You can dwell on your monetization model and profitability too.

In any event, ensure that any figures you're mentioning or the used data visualization you're showing is simple to understand. All charts, graphs, tables, etc., should have context, be quick on the uptake, and shouldn't contradict each other. Be prepared to give backup and evidence to every number or to explain how you've reached a certain calculation or estimate.

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Show Your Solution

What's the likelihood that investors will strike a deal on a pitch with just an idea with no functioning product? Very low. Tangible products with proof of traction are the ones that'll be considered. So, if you've passed the POC to prototype to MVP path, briefly demonstrate what you've got.

An MVP demo can go a long way if people get to see the product in action. Or, at least, make it clear that you have something to show upon request (e.g., that you've completed the MVP development process and have a released and working product).

The benefits and product value should be your focus at this point. Try to outline why customers will care about the product and how it'll help them at solving a pain point instead of talking about the variety of future features you have on your product development roadmap.

Don't Go Into Too Much Detail

At the same time, you will most likely be tempted to explain every tiny detail and show your product from every possible angle. Being too detail-oriented is uncalled for when pitching to investors, really, for several reasons.

First of all, you have to note the tradeoff regarding the investors' attention. There's a limited capacity of things people can remember, and because VCs and investors see too many presentations, it's silly to assume that all of these peculiarities will stick. 

Secondly, think of this as your chance to make a first impression. Just as it goes with first dates, some questions should be left unanswered to fuel interest in further communication in the future. You'll want them to "call you", right? Hence, cover only the key points, highlights, most important major takeaways, and add enough hooks to "land your second date" and continue the discussion to find out more. If things go well, the investors will most probably initiate a technical due diligence process later on to audit the state of the product.

Make Your Call to Action Clear

What is your funding ask? What do you ultimately want from the investors? One too often, startup founders end their presentations with cliffhangers and don't state how much investment they're seeking.

Instead, formulate your ask by noting the approximate required sum, how you plan to use the obtained resources, and the estimated runway. There's no single correct answer to how to ask investors for money the right way, but being as clear and transparent as possible won't hurt.

More Tips on How to Pitch Investors Successfully

What else should you know about if you'd like to raise the odds of securing the deal? Here are more recommendations on how to pitch to investors effectively.

Try to Connect with the Audience

How do you choose a tone that'll set a more personal and casual direction for the investment pitch discussion? Well, you may begin your presentation by actually asking what the audience would prefer you to focus on. For example, if they're interested in the total addressable market, you can devote more time to cover this area of your presentation.

Mind that investors care about the people they'll potentially deal with or work with no less than the product itself. If you want to connect with the audience, you have to be natural, sound confident, and behave authentically. Do your best to maintain a professional yet easy-going tone, as if you're talking to people you know for a very long time. 

Prioritize Brevity

If you're not sure how to pitch for investment the right way, always remember that the clock is ticking. Therefore, getting to the point quickly is another must-do.

Being minimalistic is definitely the right direction to move in and is among the main pitch presentation tips. Try not to bore your audience with too much information, so don't use too many words and simplify every explanation or concept you're trying to convey.

Boost Your Speaking Skills 

Having strong oral presentation skills can make all the difference while you'll be presenting the key aspects of your product that are displayed in the deck. If you're not sure how to pitch to investors and get them to really listen to what you're saying, you have to know how to use your voice, articulate, and get the right message across. Here are some best practices:

• Don't rush, speak slowly.
• Don't mumble.
• Use your natural, calm voice.
• "Umms" and other interjections don't inspire credibility, omit these pause-fillers to sound more confident.

Mentioning other presentation tips for pitching to investors that are points worth noting:

• Use simple vocabulary (don't overcomplicate things by using very difficult words or unneeded jargon; don't force your listeners to make an extra effort to understand what you're trying to say, this isn't the time or place to show off your knowledge of fancy terms).
• Use shorter sentences.
• Try to avoid cliches and predictability (if people can guess what you're about to say, that isn't always good).
• Get rid of buzzwords that don't convey true meaning.

Mind Your Body Language

Natural gesticulation is important to support what you're saying while you pitch investors. Yet too many hand signals can be distracting to the audience. If you know that this is your soft spot, try to control yourself and avoid sudden excessive movements and unnecessary twitches. 

Eye contact is crucial as well, even if you're communicating via a screen. Look at the people you are talking to and avoid reading off a paper or other reference material at all times.

Finishing on a Strong Note

How do you end your conversation? Summarize everything you've talked about, overviewing the highlights in a nutshell. Perhaps you can rephrase the tagline you've begun the presentation with so that the main message sticks as you pitch your idea to investors one more time.

Then move on to answering questions the investors may ask you or would like to clarify. Give confident replies going back to the value of your product. Try not to waffle on, giving useless information. And if you can't answer a hard question you weren't prepared for, give the best reply you can, noting that you'll get back with a more precise and detailed answer later on.

Wrap the conversation up by stating your call to action. Also, inquire about the next steps you should expect and the approximate timeline.

Concluding Thoughts on a Convincing Investors Pitch

Raising money is challenging, the competition is rough, and the overall low success rate of such fund-seeking presentations might not be encouraging. As a startup owner, you should be ready to go through several pitch rounds before getting a check signed. However, reaching out to truly selective investors can be an experience to learn from, so you must fine-tune your investment pitch every time.

Surely, there are many components forming a successful pitch. This is a strategic approach to such a time-constrained process which makes sense if you'd like to get the desired financing and results. Nonetheless, there's still a pinch of luck and a deal of preparation that can turn the tide. And the knowledge regarding how to pitch to an investor comes with practice.

As a product studio, Upsilon knows how tough fund-raising could be. However, many startups that have used our MVP development services or turned to us for IT staff augmentation services to build their products have managed to raise funds and make successful exits. So if you're in search of a trustworthy and experienced tech partner, feel free to contact us to discuss your plans!

FAQ

1. What does pitching to investors imply?

An investor pitch implies presenting a company or product to potential investors. Such a presentation is a brief yet concise introduction of the offering with the must-know highlights. It makes the business opportunities clear and convinces investors to provide funding.

2. Why are business pitches important?

Business pitches are vital if a company wants to secure external funding. Such presentations show the product or offering in a favorable light, and get the conversation with investors going. Of course, it isn't a quick or simple process, you have to know how to pitch a startup effectively to raise your chances of obtaining funds.

3. What makes a successful pitch?

A good pitch is one that can prove that the offering is truly worth investing in. It shows the product's traction, gives a demo, sheds light on the metrics, research, and calculations, and proves that it's a promising business opportunity. Such a presentation is catchy, to the point, and intriguing enough to get additional meetings scheduled afterward. These are a few secrets to how to present to investors successfully.