Investors bring many benefits to a small business. They provide working capital, help business owners get access to the resources they need to become profitable and provide expertise in planning and management. However, when you seek out investors, you have to keep in mind that they're incredibly busy people. They're happy to support companies that fit with their investment strategies, but you need to get their attention first. An elevator pitch is the most important tool you have to accomplish this goal.
What Is an Elevator Pitch?
An elevator pitch is a 30- to 60-second summary of your business. It should hit on the most important things that an investor wants to know about and leave all the other details for groups that want more information. This type of pitch gets its name from the average length of an elevator ride. If you aren't done by the time you reach the investor's floor, you may have lost your opportunity.
What Should You Cover in the Elevator Pitch?
What are the things to include in your pitch? The opening is the most important part, and it needs to capture the investor's full attention. In most cases, you hook them with a major problem that your business solves or the results that your customers can achieve. Give everyone a reason to listen to you for the next minute by engaging them right away.
The rest of the pitch should cover your company name and who you are, as well as a summary of what you do. If you didn't identify your target market with the introduction, make sure to talk about the audience that falls under your buyer personas. Another important element is your key differentiators. Chances are, these investors have heard from hundreds or thousands of small business owners. What makes you different in your market segment and how do you plan on succeeding?
The last part of your elevator pitch is almost as important as the first. Include a Call to Action, where you clearly state the next steps. Do you want investors to take your business card, set up a call or look at a software demo? Give them a clear path to express their interest and a way to get more information on your business if they want to move forward.
Sometimes you get a few extra minutes to talk with the investor. In these situations, you can include ways that your company is already making an impression in your market, the closest competitors and how you have the edge over them, and your current financials.
How Do You Put an Elevator Pitch Together?
You have approximately 200 to 250 words to impress someone who could contribute millions of dollars to your company. There's a lot of pressure to get this right, and you need to do more than list out the components mentioned above.
Here are a few ways to transform your individual talking points into a smooth and effective pitch that gets your foot in the door with investors:
- Go through your pitch and remove as many buzzwords as possible. You may not know an investor's background in your market segment, and if you use a lot of terminologies they don't understand, you can't get them interested. For any jargon that has to stay in your pitch, provide a contextual definition to avoid any confusion.
- Think of how to move from section to section smoothly. While you have clearly defined topics that you want to cover in your elevator pitch, the entire thing should have a conversational flow. One area to look at in particular is how you transition between ideas. Use a logical structure that walks the investor from the exciting lead-in to what you do. The best-case scenario is building up their excitement, so they're ready to take the next steps when you reach the end of the pitch.
How Do You Refine an Elevator Pitch?
You don't want to put together a pitch and immediately use it on investors unless you have no other alternative. Start your practice sessions by saying it in the mirror or in front of your employees. You want to repeat your pitch so many times that you know it inside and out. You never know when you might run into an investor, so it pays to be prepared. Plus, you can easily explain what you do to friends and family at the weekend cookout.
Once you feel that your pitch is in a good place, go to a networking event that caters to small business owners and get feedback on the pitch. You can edit it and make changes based on input from companies that have gone through this process before. Some consultants specialize in crafting these pitches and other material for investors. If you don't think you're getting anywhere with your DIY approach, you may want to bring in an expert.
Over time, you'll have a highly effective elevator pitch that gets you the results you want from everyone you talk to. Use these tips to put this powerful tool to work for your company and get the investor attention that you deserve.