Transcript
An investor pitch is basically a pitch you do to an investor when you look for money. And so you need to present yourself as an attractive investment. I think an investor pitch depends on how mature you are. So investors are looking for startups at different maturity scales. Sometimes they’re looking for very early stage startups, so you don’t have to be a very mature startup with already a number of sales and a huge market analysis and lots of partners already. That doesn’t have to mean you’re attractive to investors, but you have to identify why they should invest in you. Startups, when they go out looking for money, they have to be very clear, of course, what is their immaturity and what stage of development are they at, and then what kind of money are they looking for? Very often, my experience working with early stage startups, they don’t need investor money at this kind of built up phase.
They think they have to, they understand that successful startups had a secured number of investments as well. And they see that as the criteria for being a successful startup. And that’s not the case at all. Sometimes investor money is going to be the rocketry for your company and the path you’re on as well. Plus investor money may take you in a direction that you don’t want to grow. And so I think the fundamental question to ask yourself, am I ready for investment money? What do I need the money for? Do I need money? Do I need smart money? So there’s a lot of questions that you have to ask yourself as a startup I think before you even go looking for investment money. Is this relevant for me at this stage? Do I need it? Maybe sometimes you can get further with less money that is not investor money, but that you can get from crowdfunding for instance.
So I think there’s the investment packages that you look for, it depends on where you are in your development. And then you also make sure, okay, if I bring in the investor, what kind of investor do I bring in? Is it seed money? Is it angel money? Is it VC money? Is that because I list myself at the Nesta? Where I opened myself up as well to lots of other investors, but also a lot of requirements that follow by being a listed company. So I need to understand what is the need? What have people been using the money for? And what’s the implications for taking on board. So I think there’s a lot of fundamental questions that each startup has to ask itself. As a more mature startup, you would have done that research already, you know pretty much what you look for in an investor in money, you know how to present your case.
You’ve done it many, many times. Sometimes you also get asked by investors to come and present. I know that successful startups will sometimes get these requests and then they have to look at, okay, is this worth my time? But I think it very much depends on where you are.
Usually the format for presenting for investors can either be the typical five minute pitch, or you have the opportunity to have a longer meeting for them 15/20 minutes, or you’d be lucky and you have a whole sort of meeting for an hour or two hours. Usually with meetings, you would have sent them some material in advance about yourselves. So I think you have various presentation opportunities as a startup that you have to think about. Something that cuts across all of them is that the investor is looking for what is the drive behind this company?
Why is the company there? What is the solution? Is it a unique solution? What is the particular need they have identified where their solution will play a role. Do they have a proper understanding of the market and their competitors? And have they assessed if there is a number of competitors out there. What’s the unique value proposition? That’s different from anybody else. Do they have the right team in place? So do I feel like I’m investing in something where there’s a team that takes it forward? And this depends a little bit, there are different views on the investors, what constitutes a good team, but there’s definitely some scientific understanding, some market understanding, some sales understanding. They also want to see that this is a team that will go beyond all the testing and lab development and go out in the market because you’re only as good as things that you sell.
So it has to be very clear that you have the companies on board that want to go out and sell, and you have the drive to be out there and speak to your customers as well. A lot of young startups fail basically because they just don’t seem to engage with any of the customers and the end users. And then the compelling story as well. And sort of as a proper business plan, not an unrealistic business plan, not asking for 5 million euros for something that’s actually quite non resource intensive or where it’s not backed by any evidence. Investors don’t like a strong overinflated sense of a fantastic idea. It needs to be backed by evidence and numbers and well, a number of testing and feedback from customers. And this, you can just scale up or scale down, depending on how long you have. You really have to work on these four or five key selling points. If you have an hour, you put in more data and more evidence to support your story. If you only have four minutes, you keep the same four or five points. You just tell them much more to the point, if it’s written material, you’re sending an investor in advance of a meeting or in the hope of getting a meeting, it’s the same four or five key points, but you have to present them in a different way.
