When it comes to landing investment for a startup, the “pitch” is only the beginning. Once a founder enters due diligence with angel investors, they have about a 70 per cent chance of receiving funding, according to the National Angel Capital Organization. Due diligence is the process during which angels investigate their potential investment to review records and confirm the facts presented by the founder. But how should founders pitch to maximize their chances of reaching due diligence? I have four rules.
Understand your audience
A fantastic pitch can still fall flat if it isn’t tailored to the audience you’re addressing. If you’re pitching to a roomful of engineers at Samsung, you should provide a technical pitch with engineering results and details. However, if you are pitching to an audience of general angel investors, don’t assume they have the same sector expertise that you do. Assume that we have a university education but that our backgrounds are quite diverse. This means avoiding industry acronyms and jargon, or at least offering a short explanation of their meaning on first use.
When you’re pitching to angel investors, tell us the “Why?” rather than the “How?” by focusing on the benefits and impact of your product, rather than on all the technical features. Steve Jobs is an example of a great business communicator who was skilled at selling both investors and consumers on the impact of Apple’s products. As you’re preparing, watch some of his keynotes on YouTube to get a handle on how to target your pitch to your audience.
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