Written by Ariel Poler (mentor at Bolt)
Entrepreneurs often ask me for introductions to potential investors. What I ask them in return is a compelling elevator pitch that I can use to share the opportunity with the investor. Often, the most appropriate format is a two or three paragraph email summary. Sometimes, different formats are more appropriate - or even necessary. For example, if you are at a conference in which the introduction will be made in person, the elevator pitch must be in the form of a one minute (or shorter) spoken summary. I've found that a good 2-3 minute video can be very effective in many circumstances.
Regardless of the format, most pitches should include the following elements:
- The business in a nutshell: I like to start with this. In one sentence, what are you doing. It is important to start with this to give context to the rest of the pitch. Otherwise, the investor might not understand why you are talking about one thing or another. I know some people like to build to the bottom line, like a punch line. I don't like that approach. You risk loosing the investors attention before you get there.
- The team: focus on the characteristics of the team members that are most relevant to the success of the business at hand. Why will this team succeed with this project?
- The product: a brief demo is ideal. Focus on what makes the product special. If a demo is not possible, try to share some screenshots or mock-ups. The product is obviously one of the most important elements of the pitch, but shouldn't dominate it. I see many pitches which are 80% about the product. You are not selling a product to investors. You are selling a company.
- Market Opportunity: which market are you going after? The more specific you are the better. Ideally your market is not only clearly defined but also very large. Show in a back-of-the-envelope calculation the approximate market size
- Distribution: often ignored yet one of the most critical aspects of most businesses. How will you get customers? Be as specific as possible. ideally you have already run some customer acquisition tests and can share actual data.
- Unit economics: an elevator pitch is not the time to share financial projections. And for some companies the business model is obvious. If that is not the case, explain how you plan ti make a profit for a single customer. Simply put: what are your revenues and what are your costs per customer.
- Traction: What have you achieved? There are many different types of traction: users, customers, revenues, partners, employees, data, investors, etc. Show what you are doing is working at some level.
- Market Landscape: who else plays in your space? Not just competitors but others doing similar or related things. Show you understand the market well.
The above might seem like too much to cram into an elevator pitch, and in some cases you will have to pick and choose, yet I've found that a single sentence or two can convey each of the above points, so that when you add them all up you end up with a couple of paragraphs. There is a catch though: crafting the right sentences takes time and practice. Preparing a good elevator pitch takes hours of work, ideally with feedback from knowledgeable people. One free resource to help prepare compelling pitches is http://bestofangel.com.
A final thought: try to get investors "excited" about you and your business. Most investors don't follow a checklist or strict formula. They invest in the entrepreneurs that excite them.