3 reasons why business pitches are important

Importance of business pitches

Securing resources

Most often, business pitches are there to convince investors to fund your business. For this purpose businesses rely on pitch decks, tools used to persuade and attract investors to fund your company. These investors can be venture capitalists or so called business angels. Take into account that most venture capitalists receive thousands of pitches a year. In order to attract the most suitable VC, you have to consider three things:

1. Investment is risky! Most investors are looking for the highest return potential, which is at least 10 times more than the initial investment.
2. Look for investors that specialize in your field. That can include experts, scientists, or capitalists that have previously worked or invested in your area.
3. Seek out the perfect fit. Don’t choose the richer investor, who does not understand your startup idea, instead focus on investors that share the same values and business ethics like you. At the beginning, invest in compatibility, not profitability.

To make the most out of your business pitch, create the perfect pitch deck that includes the following sections: company vision, business problem (& solution), market analysis, competition information, the value proposition, your revenue model, the team, the financial information, and the current status and use of funds. With the right pitch deck, and suitable investor, you are sure to attract their attention and secure your funds.

Showcasing your skills

Nothing highlights the importance of a good business pitch like the preparedness and charisma of the person who delivers it. Put simply, business pitches are always delivered by people, even if they are presented in a written form. Therefore, pitching your ideas is the perfect way to showcase your skills and abilities to potential investors. A successful pitch showcases at least three of the following skills: communication, research skills, problem solving abilities, creativity and public speaking.

Communication skills refer to your persuasion, negotiation and overall verbal presentation skills. The way you talk about yourself, your business, but also the way you pose questions and listen to others are all important details when it comes to pitching. Empathy is also essential when thinking about what words to use when approaching a sensitive topic. 

A well-prepared pitch is heavily reliant on research. Think of the research as an exercise in credibility. The more evidence-based your pitch is, the more confident and persuasive you sound. Furthemore, a well-researched pitch demonstrates that you can work with multiple sources of information. Which leads us to another skill a good pitch demonstrates well: the ability to formulate and solve problems. The stakeholders need to know that you understand the pain points and can already offer some solutions. Show how you solve the problems by using every tool in your toolbox: visuals, texts, data, statistics, etc.

Solving problems is not only about analytical skills, but also about your creativity. Investors value innovation, the product of the creative mind. To be innovative you need to be willing to experiment and go beyond the boundaries of the expected. Solutions are the result of any good analysis, but the most novel and original solutions are only achieved through creativity. Finally, the most salient skill that comes across during a presentation is your ability to speak publicly. Body language, verbal skills and confidence are the three main ingredients of a good presentation.

Boosting your network

A pitch needs to be well-researched, evidence-based and adjusted for the right audience. The successful business owners know their audience well. The presentation needs to make this clear, as all the stakeholders learn who the customers are. For example, a pitch about a software company needs to focus on a younger demographic that would be using the software, instead of older people who have no access to technology.

Moreover, knowing your customers goes beyond your presentation. Use the time you research your pitch to actually interview and get to know your customers. This may refer to a full-scale interview or a field research project. In any case, use the pitch as an invitation to know more about your customers, as it will reflect on your speech. Finally, some of the customers you meet might become future partners or even investors.

Fundraising is also focused on convincing an individual or a group of people to invest in your business. This can be an angel investor or a venture capitalist. Angels are people who decide to invest on their own, which makes the investment smaller, but also riskier. The venture capitalists, on the other hand, work with money from different sources and invest it on their behalf.

When preparing the pitch, research carefully all the investors, as well as the firms and corporations they might be attached to. The amount of money they are willing to invest is important, but what is most important is whether they fit your vision and values. It can be difficult to collaborate with investors that won’t be interested in your product or marketing style in the long run. Find investors that are financially attractive, but also ones that you can see yourself trusting in.

Types of business pitches

Have a clear idea about the content and length of your pitch before delivering it. Depending on those two factors there are three types of pitches: 

1. An elevator pitch: If the pitch is short enough to be delivered during an elevator then you have a short pitch on your hands. The purpose of this pitch is to acquire an additional meeting where more details could be discussed at length. 
2. A live plan: Instead of a spoken presentation, a live plan relies on all of the information in a written form. The salesperson may decide to include a market summary, financial or legal data, as well as the potential business goals. If the investors are interested then they can demand a more detailed pitch.
3. A presentation: When a meeting is secured then the salesperson is to deliver a presentation that explains in detail what the business does, its financial situation, its challenges, goals, etc.

Conclusion

If you are lacking that extra financial push to take your business to the next level, finding a fitting investor is what you are looking for. The right person to invest in your business can offer more than money, but also expertise, connections and counsel to a struggling business owner. Consider sharpening your skills, writing, honing and later delivering the perfect pitch to the right people and you might gain a lot more than anticipated.