There is a well-known set of rules on how to make a good Elevator Pitch, which mostly focus on four aspects of form and content:
- Be brief (your audience’s time is limited)
- Be clear and direct (your son and grandmother should get it)
- Underline the growth potential and market size (and make it big!)
- And explain how and why you can make it (show me the money!)
The problem is that everybody knows all this and entrepreneurs are increasingly skillful when it comes to presenting their investment opportunities. As a consequence, a good elevator pitch is necessary but not sufficient; you need one that is more than just a well-developed exercise and for that you need to acknowledge a few points:
- There are two distinct types of EP. In one-to-ones you talk to one person and in forums you speak to a bigger crowd in the framework of a competition or an investment event. You should not have the same EP for both as the dynamics are different.
- The EP falls within the overall communication process of start-up financing – the most critical stage for entrepreneurs. This is the moment when more than 50% of investors decide whether they are interested in a project or not.
- One-to-one: You are not doing an EP to raise awareness of your project (how many times have I heard that!) you are here to get a meeting. You are buying NOW time from this potential investor NEXT WEEK. So your goal is to have your interlocutor take out his/her smartphone and open their agenda. Don’t take “Contact me through LinkedIn” or “give me your card” as a “YES, I am interested”: IT IS NOT.
- Forum: Be prepared (know the audience you have to convince), be savvy (there are always at least 10 other pitches in your thread, make sure you are not number 9 or 10), be different (make sure you are easy to remember).
- In most cases it is the first time that those potential investors are seeing you. YOU ARE THE PROJECT at this point. You must show enthusiasm, passion and commitment (even if you just had a fight with your kids or your husband/wife).
- If you want a YES, you need to risk getting a NO – always finish with a call for action.
- There is no good reason not to train. It is a very competitive market and investors have a limited amount of time to take their decisions. Do not give them the opportunity to disregard your project because you did not work on your EP (a typical EP lasts no more than 3 minutes. If you practice for 3 in the morning and 3 before bed every day for a week, this is 42 EP minutes, and one thing is for sure: number 43 will be better than number 1.
Don’t forget one thing: this is capitalism 101. The early stage investing ecosystem is a marketplace where demand for money IS GREATER THAN the offer of FUNDS (at least in Europe – Q3 2015), which creates enormous competition among entrepreneurial ventures. Don’t miss your chance because of a bad Elevator Pitch.