How to pitch to an investor
Having been entrepreneurs for 15 years, we’ve pitched and been pitched to more than most. Since we sold to Wesfarmers, we’ve heard more than 100 pitches: some as boardroom presentations, some via email, SMS and LinkedIn, and some randomly—walking the dog, at the bakery and even in a conference bathroom! Talk about keen. We’ve discovered that, like white keys in an octave on a piano, there are seven notes a business should tune in order to get its pitch right.
As an entrepreneur, you never know when the opportunity to pitch might come up so it’s a good idea to have a strong pitch ready to go, just in case. It needs to be short, sharp and shiny; you may only have as long as it takes for us to buy a loaf of bread.
When Matt Dyer hit us up with his EatNow.com.au pitch, he hit the seven notes that piqued our interest. That worked out pretty well for Matt. After just 18 months of working with him, we sold EatNow to Menulog for over $800 million, turning many who worked in the business, including Matt, into overnight millionaires.
We can’t show you the exact pitch he gave us, but here’s a sample of what a pitch from someone like Matt should contain that would get the attention of people like us. Let’s call the business ‘EatAtHome’, the entrepreneur is called Paul and he is trying to sell us on the concept of a home delivery platform concept.
Use this as a template for creating your own pitch and you’ll get instant attention. We’ve made up some of the content here to demonstrate the principles but you’ll get the idea.
1. Interesting opening
We’ve received dozens of emails with subject lines that beg to be deleted before they’re even opened: Lines like, ‘Invest in the next Facebook, Hurry’.
Paul’s subject header is relevant, intriguing and makes us want to know more.
‘Raising funds for Aussie start-up. 30% growth month on month.’
2. Personal connections
If someone in your network knows the investor you’re pitching to, mention this. It quickly captures the investor’s attention and builds credibility:
‘We’re both friends of Joe B from FutureTech…’
3. A succinct summary
People are busy so quickly identify the ‘problem’ and how you plan to solve it. Whose problem is it? How big is the problem? How many people would benefit? Who else is trying to solve this problem? How is your solution better?
‘EatAtHome’ helps over 1,000,000 Australians avoid driving to their favourite takeaway store to pick up their dinner by delivering hot, local restaurant meals to their door for no extra charge, without having to pick up the phone. It’s done fuss free through our website or app.’
4. Clear momentum
Investors like to be on a winning team so explain how your business is picking up speed. Focus on an area of the business that’s growing fast, and spruik it clearly.
‘EatAtHome’ had solid figures and a goal: ‘In the past 6 months, we’ve added 500,000 new users and 1,000 new restaurants to our site, and we are looking at doubling that in the next 3 months.’
5. Showcase the team
You want the investor to feel the team you have created has the relevant experience, skills and networks to be successful, so highlight the skillsets of most relevance to your start-up. Yes, it’s fascinating that your CTO worked for NASA but it’s irrelevant to a food start-up. Paul tailors it for the sector:
‘Our team includes a chief marketing officer of Australia’s largest pizza franchise group and a CTO from a leading restaurant point-of-sale company.’
6. Social proof
Investors need ‘social proof’ to know your product works and that your customers are happy, so feature testimonials from high profile customers or those with high credibility. Paul does this effectively by using clear, specific numbers.
‘We already have over 300,000 active monthly customers with some of the CBD’s largest corporates using ‘EatAtHome’ daily to order group dinners to their offices.’
In addition, demonstrating affiliations with credible sources will strengthen your pitch and give investors confidence. Here’s what Paul’s pitch said:
‘We’ve developed an order management system so innovative we’ve been approached by two of Australia’s largest restaurant operators to integrate with our software.’
Media coverage also lends weight to your credibility. Paul’s pitch included:
‘You may have seen ‘EatAtHome’ featured in BRW, as well as national newspapers. Our app reached #1 in its category in the Apple store and is a finalist in the Online Retailer Industry Awards for best mobile application.’
And lastly, if your start-up has attracted interest from high-profile advisers or investors with relevant experience, mention them. This endorsement provides further proof that someone is willing to put their money and/or their name behind your business.
7. A specific ‘ask’
The most important aspect of your pitch is ‘the ask’ and yet it’s the one that most people forget to include, or pay too little attention to.
What are you actually asking for? How much are you raising? What fundraising stage are you at (Seed, Series A, etc)?
This warrants a conversation with the investor so make it easy for them to catch up with you. While you’ll need to accommodate the investor’s schedule, suggesting a date and time is a good place to start. Here’s what Paul proposed:
‘We’re raising $750,000 in a Seed Round, which I’d love to discuss with you next week if you’re available. I’m in Melbourne Tuesday to Friday and can be flexible around your schedule.
As you can see, in less than 300 words Paul established a personal connection, explained how ‘EatAtHome’ solved a problem, conveyed its traction in the market, showcased his team and staked his claim for what he wanted, and what he was looking to achieve.
We’ve been pitching all our lives – from our time at the Croydon markets, to our breakthrough event at Ingram-Micro that changed the course of our business forever. We were still pitching (to Wesfarmers) when we sold the business for over a billion dollars. Here’s the thing. You never stop pitching. So, the sooner you get better at it, the quicker you will see success. Check out our book for lots more tips on how you can be better at getting investors and the media interested in what you do.