Pitching your startup ideas effectively is a crucial skill that will help you acquire financing, customers, partners, and top talent. These notes will help you improve your pitching skills and recruit potential co-founders. This intensive, collaborative workshop by leading startup Founder Jayesh Parmar was designed to help you understand the key ingredients of a successful pitch.
1 MIN PITCH FORMULA
My company, name of company, Is developing a defined offering To help a defined audience solve a problem with Secret sauce.
My company, the founder institute, is developing a training and mentoring program to help entrepreneurs launching a new startup create meaningful and enduring technology companies with shared equity that encourages peer support. Complete your Founder Institute application at www.fi.co/join
My company, Explainer Videos Vancouver, is developing animated sales videos. We help Internet and eco-friendly organizations tell their story while explaining the benefit of their product or service. Explainer videos help increase conversions, handle objections and are more engaging than static boring text. We create thoughtful quality videos for high-value clients who understand the importance of branding and marketing. You can check out our work at ExplainerVideosVancouver.ca
- A note is a debt security obligating repayment of a loan at a set interest rate in a defined time period. The following are three types of notes.
- Read more: Investopedia
- Seed money, sometimes known as seed funding or seed capital, is a form of securities offering in which an investor invests capital in exchange for an equity stake in the company. The term seed suggests that this is a very early investment, meant to support the business until it can generate cash of its own (see cash flow), or until it is ready for further investments. Seed money options include friends and family funding, angel funding, and crowdfunding.
- The first major round of business financing by private equity investors or venture capitalists. In private equity investing, an “A” round, or Series A financing, is usually in the form of convertible preferred stock. An “A” round by external investors generally takes place after the founders have used their seed money to provide a “proof of concept” demonstrating that their business concept is a viable – and eventually profitable – one.
NOTES FROM PITCH YOUR IDEAS LIKE A PRO
PRACTICE PRACTICE PRACTICE = CONFIDENCE
- Body language is so important.
- Hook the investors in the beginning of your presentation
DO YOUR HOMEWORK:
- Do lots of research
- Know who you are pitching to
- Crunchbase and Angel List is your friend
- Find investors that understand your business
- Know their story
- Do not pitch your ideal investor first
- You will find out how to iterate your pitch
- You will need to have good answers to all their questions
- Fundraising takes time
- You are going to get rejected a lot
- View it as a data point. Something to learn from.
- Find out the reasons why they didn’t invest
- Ego is your enemy
FEAR & GREED:
- Most investors invest because fear or greed
- Your job is to create fear and greed
- Fear of missing out on a great opportunity
- Create a feeling of scarcity. Like they will miss out if they don’t invest now.
- Investors will test you to see if you know what you are doing
FFF = FRIENDS, FAMILY & FOOLS
- You will need at least 100K just to get started
- Then move onto seed round funding
P = Product
T = Team
T = Traction
- Cash, Users
M = Market Cap
THERE IS NO SILVER BULLET
- Be authentic conversational
- If you are too salesy you will push people off
- They’re buying into your vision
- A pitch is a date. Your goal is to get a second one
- Ask for warm referrals from your strongest connections
- Strongest connection come from another founder
- Pitching is a full-time job that needs focus
- Kill the writing and don’t use too much text. It distracts them.
- The focus should be on you
- Be more interesting than the image
- Make your pitch exciting
IDENTIFY THE PROBLEM
- Be a painkiller not a vitamin
- Talk about the solution
- Show customers and sign ups
- Show your customer personas
- Customer validation
- 900 users –> 10% sign up –> = 45mil
- Talk about your traction
Show the market cap.
- Whole market –> dream –> realistic.
Do not hide from your biggest competitor
- Highlight the difference and why you’re better
- Eliminate objections
Talk about your business model
- Freemium –> Premium –> Flywheel
Use of funds
- How much you’ve raised
- 30% tax credit incentive
- IRAP SHRED
- Show current investors as social proof
- Talk about your team
- Your biggest pitch is on your team
- Your team should have the skills you don’t have
- Fill in the gaps
- I believe it is essential to have a cofounder even from the beginning
- It’s rare for a single co-founder to get funding
- Investors are looking for a team
- You need a hustler / front man, a hacker and a designer
What if I have no money and no team?
- Get a co-founder
- Someone willing to go on a ramen noodle diet
- You can use employee stock option as a way to attract talent
- Pay people with equity with E stock
- Good talent will attract more talent
- Find people that are more attracted to your vision than money.
Have a version of your pitch in layman’s terms if you have to explain your business to a non-technical audience. Not everyone will know what an API is.